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Equilibrium, comparative statics and elasticity Flashcards | StudBud

Explore/Equilibrium, comparative statics and elasticity

Equilibrium, comparative statics and elasticity

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Getting into the weeds on supply and demand

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Questions 10

Answers

1
There is a shortage in a market when...
price is above the equilibrium price
the supply curve shifts
the demand curve shifts
price is below the equilibrium price
2
A perfectly inelastic demand curve...
is steeper
is a horizontal line
is less steep
is a vertical line
3
Goods that are necessities have....
more elastic demand
more inelastic demand
4
There is a surplus in a market when....
price is above the equilibrium level
the demand curve shifts
the supply curve shifts
price is below the equilibrium level
5
When supply in a market falls...
equilibrium price rises and equilibrium quantity falls
equilibrium price rises and equilibrium quantity rises
equilibrium price falls and equilibrium quantity falls
equilibrium price falls and equilibrium quantity falls
6
To calculate elasticity of demand you divide
the change in Q by change in P
Q by P
the percentage change in P by the percentage change in Q
the percentage change in Q by the percentage change in P
7
A perfectly elastic demand curve....
is perfectly vertical
has a more gradual slope
is a line that goes through the origin
is perfectly horizontal
8
Comparative statics: when demand rises...
equilibrium price falls and equilibrium quantity rises
equilibrium price rises and equilibrium quantity falls
equilibrium price rises and equilibrium quantity rises
equilibrium price falls and equilibrium quantity falls
9
Price elasticity of demand measures...
the responsiveness of the supply curve
consumer tastes
the responsiveness of the demand curve
the stickiness of prices
10
Goods with close substitutes have...
more elastic demand
less elastic demand