California State University, Fullerton - ECON 315 1)What do economists use to describe the amount of good X that will be purchased at different prices of good X, at different prices of related goods, and at alternative income levels?   In the following linear demand function, Qxd = a0 + axPx + ayPy + amM + ahH, where Py is the price of related goods, M is income, and H is other factors, the value of ay is?   When a demand function is written with price on the left-hand side of the “equals sign” and everything else on the right-hand side, it is called?   Which area forms consumer surplus?   An increase in consumer income       the demand for normal goods and       the demand for inferior goods

California State University, Fullerton - ECON 315

1)What do economists use to describe the amount of good X that will be purchased at different prices of good X, at different prices of related goods, and at alternative income levels?

2. In the following linear demand function, Qxd = a0 + axPx + ayPy + amM + ahH, where Py is the price of related goods, M is income, and H is other factors, the value of ay is?

3. When a demand function is written with price on the left-hand side of the “equals sign” and everything else on the right-hand side, it is called?

4. Which area forms consumer surplus?

5. An increase in consumer income       the demand for normal goods and       the demand for inferior goods.

6. In the following linear demand function, Qxd = a0 + axPx + ayPy + amM + ahH, where Py is the price of related goods, M is income, and H is other factors, the value of aM is?

7. Consider the following demand function: Qd = 900 – 15P, solve for the inverse demand function.

8. The difference between what consumers are willing to pay for a good or service and the market price is known as?

9. Which of the following leads to a decrease in the current demand for dishwashers?

10. Consider the following linear demand function where Py is the price of related goods, M is income, and H is other factors: Qxd = a0 + axPx + ayPy + amM + ahH. According to the law of demand, the value of ax is?

11. When consumers expect higher future prices, what types of goods do they tend to stockpile?

12. The difference between the market price and the amount at which producers are willing and able to sell a good is called                            surplus.

13. Demand is given by: Qd = 20 – 3P Supply is given by: Qs = 2 + 3P

If the government imposes a $2.50 price ceiling on this market, then the full economic price paid is equal to $                            .

14. Which of the following is an example of a price floor?

15. Demand is given by: Qd = 20 – 3P Supply is given by: Qs = 2 + 3P

If the government sets a price floor of $4 in this market and then agrees to buy up any surplus that exists, then the cost to the government will be equal to $ .

16. When a price floor applies to a product, rather than labor, the deadweight loss will always be less. (T/F)

17. A price ceiling is considered effective if it is set          the equilibrium price.

18. A binding price ceiling tends to create what type of condition in the market?

19. Which of the following expressions best describes full economic price?

20. Comparative static analysis assumes which of the following?

21. When demand for a good or service increases, which of the following occurs?

22. Suppose that there is a drastic decrease in excise taxes levied against suppliers of baseball equipment. What can we expect to see in the market for baseball bats?

23. What can we predict about the market for red wine if both demand and supply increase simultaneously?

24. What type of analysis studies the movement from one equilibrium to another?

25. Which of the following occur when the supply of a good or service increases but the demand remains the same?

26. Define surplus

Supply exceeds demand

27. A function that describes the relationship between output and various prices of that output, prices of inputs, and values of other variable is called

28. When a supply function such as Qxs = 15Px – 1200 is represented with price isolated on the left-hand side, it is called

29. The following function, Qxs = (Px, Pr, W, H), shows that the quantity produced in a market depends on the price of the good, Px, and

30. If a product is not perishable and firms expect the market price of the product to increase in the future, then the current supply of the good                      (one word).

31. According to the law of supply, as the prices of a good increases, Supply decreases

32. A decrease in supply is shown by which of the following?

33. According to the law of supply, as the prices of a good decreases, Supply decreases

34. Which if the following describes supply and demand analysis?

35. When a surplus exists, there is a tendency for price to          in order to equate quantity demanded and quantity supplied.

36. If the price of a good or service is less than the equilibrium price, a        exists. As a result, the price tends to                             .

37. Demand is given by: Qd = 20 – 3P Supply is given by: Qs = 2 + 3P

If the government sets a price floor of $4, what is the amount of the surplus or shortage the market experiences?

38. Determine the effect in the market for chicken if the federal government subsidized chicken production and, at the same time, the price of pork, a substitute, decreases. The effect on equilibrium price is uncertain

39. When a shortage exists, there is a tendency for price to        in order to equate quantity demanded and quantity supplied.

40. What can we predict about the market for craft beer if both demand and supply decrease simultaneously?

41. What is the economic condition where there is neither a surplus nor a shortage?

42. The law of demand analyzes the relationship between price and quantity demanded holding which of the following variables constant?