question
What refers to consumers purchasing more of some good in response to a price increase for another good?
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Substitution effect
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Suppose the price elasticity of demand for cheeseburgers equals 1.37. This means the demand for cheeseburgers is?
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Price elastic
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A perfectly price-elastic demand curve is?
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Vertical
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Ceteris paribus, a good that is a necessity tends to have?
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Perfectly inelastic demand
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What implies that quantity supplied is zero below some price and infinite above it?
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Perfectly elastic supply
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What is calculated by dividing the % change in quantity demanded by % change in income?
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Income elasticity of demand
question
What effect tends to decrease revenue after a price increase for some product?
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Quantity
question
Perfectly elastic demand...
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Can be represented by a line parallel to the horizontal axis
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The percentage change in quantity demanded of one good or service divided by the percentage change in the price of a related good or service is what?
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Cross-price elasticity of demand
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Which of the following would be most likely to have a vertical supply curve ?
answer
Paintings by Van Gogh
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If the price elasticity of supply is greater than 1, then...
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Supply is price-elastic
question
The price elasticity of demand coefficient is a measure of...
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Buyer responsiveness to price changes
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If the income elasticity of demand for a good is positive, the good is said to be a/an...
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Normal good
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Downward-sloping linear demand curves are...
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Elastic in high-price ranges and inelastic and low-price ranges
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What is generally more elastic in the long run than in the short run?
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Demand
question
What can always be found by multiplying price and quantity?
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Total revenue
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Cross elasticity of demand measures how sensitive purchases of a specific product are to change in...
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The price of some other product
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Suppose the price elasticity of demand for Dr. Pepper is 0.25. This means the overall demand for Dr. Pepper is...
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Price inelastic
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An important determinant of the price elasticity of demand is the...
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Availability of substitutes
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To say that two goods are complements, their cross-price elasticities of demand should be...
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Less than zero
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The percentage change in quantity demanded of one good or service divided by the percentage change in the price of a related good or service is...
answer
Price elasticity of demand
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After a price decrease, the price effect tends to ____ total revenue and the the quantity effect tends to ____ total revenue.
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Decrease;Increase
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A long a given demand curve and increasing the price of a good will
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Decrease consumer surplus
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Consumer surplus is represented by the the area ______ the demand curve and ______ the price
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Below; Above
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A regressive tax is one that takes a...
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Lower percentage of income as income rises
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Economists described the satisfaction consumers receive from consuming goods and services as...
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Utility
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Producer surplus for an individual seller is equal to...
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The willingness to pay for the good, minus the price of the good
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The incidence of a tax...
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Refers to the share the tax paid by consumers and the share paid by sellers
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A line representing all the possible combinations of two commodities that a consumer can purchase at a particular time, given the market prices of the commodities and the consumer's income, is a/an...
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Budget line
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A tax that takes a larger share of the income of high-income taxpayers than of low-income tax taxpayers is called a...
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Progressive tax
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The amount by which total utility increases or decreases when an additional unit of a good is consumed is called ______ utility
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Marginal
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Consumer surplus for an individual buyer is equal to what?
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The consumer's willingness to pay for the good, minus the price of the good
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At the optimal consumption bundle...
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The marginal utility of all goods consumed is equal
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The principle of diminishing marginal utility...
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Refers to the tendency of marginal utility to decline as the amount of consumption of a good or service increases
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Willingness to pay refers to...
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The maximum price at which a buyer will buy a good
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A consumer's spending is restricted because of...
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A budget constraint
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Taxes paid on the purchase of specific items such as gasoline, cigarettes, or alcoholic beverages would fall into the category of...
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Excise taxes
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Total surplus is...
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The sum of consumer and producer surplus
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