Midterm Study Guide
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This 4 page Study Guide was uploaded by Taryn manciu on Saturday October 31, 2015. The Study Guide belongs to Econ201 at University of Oregon taught by Keaton Miller in Fall 2015. Since its upload, it has received 457 views.
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Date Created: 10/31/15
10 12 Study Guide A Change in the expectations of consumer about their future income with create a Movement along the demand curve b Shift of the demand curve An increase in the number of consumers with create a Movement along the demand curve b Shift in the demand curve A decrease in the price of wine will create a Movement along the demand curve b Shift in demand curve What are the factors that determine demand What are the factors that determine supply If a shortage exists in the market then the current price must be lowerhigher than the equilibrium price For the market to reach equilibrium you would expect persistent excess demand sellers to offer lower prices buyers to offer higher prices True or False When both the demand and supply curve shift the curve that shifts the smaller magnitude determines the effect on the undetermined equilibrium object What are the determinants of price elasticity of demand A good without any close substitutes is likely to have relatively inelasticelastic demand since consumers cannot easily switch to a substitute good if the price of the good rises If the following goods are prices approx the same which one has the least elastic demand Amputation procedures for diabetes sufferers Sports car The following represent what kind of elastic demand Red Bell Pepper mostinbetween least Vegetables most inbetweenleast Food most inbetweenleast Compared to the shortrun demand for oil the demand for oil in the long run will tend to be moreless elastic 13 How do you know if the region is elastic unit elastic inelastic 14 Two goods are said to be complements when what happens 15 Two goods are said to be substitutes when what happens Terms to be familiar with and miscellaneous Quantity Demanded The amount of a good that buyers are willing and able to purchase at a given price Demand Curve A graphical object showing the relationship between the price of a good and the amount of the good that buyers are willing and able to purchase at various prices Demand Schedule A table showing the relationship between the price of a good and the amount those buyers are willing and able to purchase at various prices Law of Demand The claim that with other things being equal the quantity demanded of a good falls when the price of that good rises Quantity Supplied The amount of a good that a seller is willing and able to supply at a given price Supply Curve A graphical object showing the relationship between the price of a good and the amount those sellers are willing and able to supply at various prices Supply Schedule A table showing the relationships between the price of a good and the amount of it those sellers are willing and able to supply at various prices Law of Supply The claim that other things being equal the quantity supplied of a good increases when the price of that good rises Price elasticity of demand measures the responsiveness of consumers to change in price Consumer surplus difference between a buyers willingness to pay and the price the buyer actually pays Producer surplus the difference between the price a seller actually received for an item and the lowest price at which the seller would be willing to provide the item Competitive market a market in which there are many buyers and many sellers so that the behavior of an individual buyer or seller has a negligible impact on the market price Equilibrium when quantity demanded equals quantity supplied Normal goods when income goes up demand increases cars TV s computers Inferior goods when income goes up demand decreases ramen noodles Taxes wedge between the price a consumer pays and the price the producer receives Opposite of tax subsidy Price ceiling law forbidding anyone from selling a good for more than the ceiling price Price floor law forbidding anyone form selling a good for less than the oor price Equations Midpoint method O 0 Percentage Change In Quantity 100 x 50me 2 PYPX Percentage Change In Price 100 x W 2 Percentage Change in Quantity Price Elastici of Demand ty Percentage Change In Price Different Parts of a Graph After Tax Demand 2 sup 9 1quot Concept Before Tax After Tax E Consumer Surplus A B C A 3 1800 E Producer Surplus D E F F 5 1350 E I Tax Revenue NA 8 D 8 900 I E Deadweight Loss NA C E I I 9 QUANTITY Pinckneys 99 59 gt19 10 11 12 13 14 15 Answers B B B Price of a related good complement of substitute Income of consumers Tastes of consumers Number of consumers expectations of consumers Price of inputs production technology number of producers expectations of producers Lower buyers to offer higher prices False The availability of close substitutes Whether the good is a necessity or a luxury how broadly you de ne the market the time horizon being considered Inelastic Amputation procedures for diabetes sufferers Mostinbetweenleast More Over 1 Elastic l exactly unit elastic below 1 inelastic An increase in the price of one good decrease the quantity demanded for the other or Vice versa An increase in the price of one good increases the quantity demanded for the other or Vice versa
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