Micro-Economics

The patent system

Google has started a project to scan all books and make those that are not copyrighted available to people free of charge. Why is it important that only books without a copyright are available?

In the area of many college campuses, parking spaces are often scarce. If these parking spaces have parking meters, which population described below would pay for parking?

Kelly is an architect, and she is trying to decide whether to hire Lawrence, a draftsman, to assist with her work. Kelly could hire Lawrence at $20 per hour, but it would take him three times as long to complete a task as it takes Kelly. Kelly is able to earn $90 per hour and has more architectural jobs than she is able to handle. Which of the following is true?

Instead of taking an economics course, Adam could have taken a history course that meets at the exact same time. The total cost of taking the economics course would be

Economists believe that optimal decisions are made up to the point where

A new tax on gasoline causes a reduction in the purchase of new vehicles with poor fuel economy. This is an example of what type of incentive?

Laura leaves her job as an accountant, where she earns $80,000 per year, to start her own business. After the first year, her business earns a profit of $60,000. How would an economist describe the profitability of Laura's career change?

Rodrigo operates a dry-cleaning service and charges customers $5 per article of clothing. Based on his knowledge of operations, the 1,000 th piece of clothing costs him $4.95 to dry-clean. If he takes additional business, however, the 1,001st piece will cost $5 for the service. Does he take the additional business?

If the price of a good increases, holding all else constant,

In March 2012, the state of California started requiring that all packaging for food and drink with the additive 4-methylimidazole (4-MI) be clearly labeled with a cancer warning. Because of this, both Pepsi and Coke changed their formula to eliminate 4-MI as an ingredient. If Pepsi and Coke did NOT change their formula, holding all else constant, what would have happened to the demand for these goods, assuming Pepsi and Coke were in a competitive market?

When the government places a tax on a good and all else is held constant, which of the following would most likely happen?

Wine and cheese are complement goods because they are consumed together. What would we expect to happen to the equilibrium quantity of cheese if the price of wine increased and all else is held constant?

If the price and quantity for an inferior good, Good X, is $8 and 6 units at the original equilibrium, what is one possibility for the new equilibrium of Good X if we see income increase and all other factors stay constant?

In one year, 15 bowling alleys opened in California. During that same year, ESPN started broadcasting professional bowling on TV, which sparked more interest in the sport. What would we expect to happen to the price and quantity of a game of bowling in California during that year?

What would we expect to happen to the price of bagels if the price of flour decreased and the price of cream cheese decreased

When both supply and demand decrease, the equilibrium price ________ and equilibrium quantity ________.

According to a supply and demand model for apples, if the average household income decreases at the same time 10 apple orchards go out of business, one would expect the equilibrium

Assume that the price of rubber increased at the same time that Michael Jordan, arguably the best NBA basketball player of all time, became famous. What do you expect to happen to the equilibrium price and equilibrium quantity of the basketball shoes that are promoted by Michael Jordan?

In agriculture, a "bumper crop" refers to a particularly productive harvest. If there is a bumper crop for wheat at the same time that more people become allergic to wheat and all else is held constant, what will happen to the equilibrium price and quantity for wheat?

A new car is typically considered to be a normal good. What would happen to the equilibrium price and quantity of new cars if there is a recession where many people lose their jobs?

If a friend says, "I am never going to buy another Avicii remix again!" his or her price elasticity of demand for Avicii remixes is

If the price elasticity of demand for Good A is − 0.2 and the price increases from $2.25 to $2.75, the percentage change in the quantity demanded of Good A is

Assume that the market for pencils is in equilibrium and that demand is very price elastic. The popularity of digital tablets and electronic pens increases and demand for pencils declines. The equilibrium change in quantity demanded is

When the price of softballs is high, a ________ in price will raise total revenue. When the price is low, the seller should ________ the price to increase total revenue.

Firms are indifferent to changing prices when the price elasticity of demand is

Winged Treasures is a specialty store that sells butterfly ornaments. The owner wants to increase her total revenue and knows that the price elasticity of demand for her product is −0.4. What should she do to her price?

When the price of erasers increases from $1.50 to $2.50, the quantity demanded of pencils is unchanged. The cross-price elasticity of demand between erasers and pencils is ________ because erasers and pencils are ________.

If the cross-price elasticity of demand between Good A and Good B is 3, the price of Good B increases, and the price elasticity of demand for Good B is inelastic, we can expect to see a ________ change in the quantity demanded for Good A.

As price elasticity of supply becomes more elastic over time, the overall shape of the supply curve

Consider two labor markets. In the first, the elasticity of supply is relatively elastic, while it is relatively inelastic in the latter. Imposing a minimum wage in each market would result in ________ unemployment in the first market and ________ unemployment in the second.

Another name for a consumer's willingness to pay is the

Which of the following statements is concerned with efficiency rather than equity?

Which of the following statements is concerned with equity rather than efficiency?

Which areas represent the total cost to society, in terms of lost social welfare, created as a result of the tax?

Which party is responsible for paying this tax out of pocket?

For any type of tax the government imposes

In the long run, both supply and demand tend to become more elastic. This suggests that, in the long run, the

Assume that a $0.10/pound tax on apples raises $100 million in revenue but causes a $125 million loss of consumer and producer surplus. From this information, we know that the deadweight loss from the tax is

The deadweight loss from a tax is equal to one half of

Peanut butter and jelly are complements. If a tax is imposed on peanut butter, how will that affect the market for jelly?

Butter and margarine are substitute goods. A tax on butter will have what effect on the market for margarine?

In a market where supply and demand are equally elastic, producers and consumers will share equally the burden of a tax because

Goods that are necessities are very likely to have

Ireland's tax on plastic shopping bags successfully reduced consumer use of these bags because the

Producers will lose no producer surplus due to a tax if supply in their market is perfectly elastic because

If a good is subject to a binding price ceiling and you purchase it on the black market, what do you expect to happen to the price over time?

Let's say that Lewis has a friend who was caught illegally buying a good on the black market. When the judge asks him to describe his friend's motivation as a buyer, which of the following would most likely be his reply?

How do consumers who are subject to a binding price ceiling respond as the time frame shifts
from the short run to the long run?

What will be the amount of government expenditure required if a price floor for corn is set at $4.50 and the government agrees to purchase the amount of disequilibrium?

As the time frame shifts from the short run to the long run, what happens to producers who are subject to a binding price floor?

Why does a surplus that occurs under a binding price floor increase over time?

If a good is subject to a binding price floor and someone purchases it on the black market, what would he or she expect to happen to the availability of the good over time