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AP Micro Challenge

AP Micro Challenge. The law of demand tells us that…. The law of demand tells us that…. the quantity demanded increases as price falls b. demand increases because price falls c. people respond to price changes

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AP Micro Challenge

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  1. AP Micro Challenge

  2. The law of demand tells us that….

  3. The law of demand tells us that…. the quantity demanded increases as price falls b. demand increases because price falls c. people respond to price changes d. demand creates its own supply, meaning that if there's a demand, supply will be created to satisfy it e. demand depends on people having income to satisfy it

  4. The law of demand tells us that…. the quantity demanded increases as price falls b. demand increases because price falls c. people respond to price changes d. demand creates its own supply, meaning that if there's a demand, supply will be created to satisfy it e. demand depends on people having income to satisfy it

  5. The law of diminishing marginal utility states that…

  6. The law of diminishing marginal utility states that… is another way of expressing the law of demand b. states that people's inclination to consume basic goods falls as incomes increase c. shows that goods lose their individual values as the total utility of all goods decreases d. is the utility equivalent to the law of increasing costs d. states that total utility rises at a decreasing rate as consumption increases

  7. The law of diminishing marginal utility states that… is another way of expressing the law of demand b. states that people's inclination to consume basic goods falls as incomes increase c. shows that goods lose their individual values as the total utility of all goods decreases d. is the utility equivalent to the law of increasing costs d. states that total utility rises at a decreasing rate as consumption increases

  8. Suppose that Ron paid a scalper (a seller in the black market for tickets) $300 for a ticket to see the Rolling Stones and his true willingness to pay was $500. We can be sure that

  9. Suppose that Ron paid a scalper (a seller in the black market for tickets) $300 for a ticket to see the Rolling Stones and his true willingness to pay was $500. We can be sure that a. the ticket scalper extracted all the possible consumer surplus from Ron b. Ron’s consumer surplus was low because he paid more than face value for the ticket c. Ron’s consumer surplus was the $60 face value of the ticket d. Ron’s marginal-utility-to-price ratio for the concert was extremely high compared to that for other goods e. Ron enjoyed $200 of consumer surplus from the purchase

  10. Suppose that Ron paid a scalper (a seller in the black market for tickets) $300 for a ticket to see the Rolling Stones and his true willingness to pay was $500. We can be sure that a. the ticket scalper extracted all the possible consumer surplus from Ron b. Ron’s consumer surplus was low because he paid more than face value for the ticket c. Ron’s consumer surplus was the $60 face value of the ticket d. Ron’s marginal-utility-to-price ratio for the concert was extremely high compared to that for other goods e. Ron enjoyed $200 of consumer surplus from the purchase

  11. Producer surplus can be represented graphically on a demand and supply diagram as the

  12. Producer surplus can be represented graphically on a demand and supply diagram as the area between price and the supply curve b. slope of the demand curve c. elasticity of the demand curve d. area above the demand curve e. area between the demand curve and price

  13. Producer surplus can be represented graphically on a demand and supply diagram as the area between price and the supply curve b. slope of the demand curve c. elasticity of the demand curve d. area above the demand curve e. area between the demand curve and price

  14. Does Tony experience the law of diminishing marginal utility from consuming Spiderman comics? How do you know?

  15. Does Tony experience the law of diminishing marginal utility from consuming Spiderman comics? How do you know? 100 90 80 60 50

  16. Suppose that the price of Beanie Baby Dolls is $8. How much consumer surplus does Chloe enjoy? How did you arrive at this answer?

  17. Suppose that the price of Beanie Baby Dolls is $8. How much consumer surplus does Chloe enjoy? How did you arrive at this answer? Buyer’s Max Price

  18. Consider the following data showing Bob’s total utility from the consumption of two goods: Winston Cup Races and Broadway musicals. Assume the price of races is $50.00, the price of Broadway musicals is $100.00, and Bob has $300 to spend on the two goods.

  19. The price elasticity of demand measures

  20. The price elasticity of demand measures the slope of a budget curve. B) how often the price of a good changes. C) the responsiveness of the quantity demanded to changes in price. D) how sensitive the quantity demanded is to changes in demand.

  21. The price elasticity of demand measures the slope of a budget curve. B) how often the price of a good changes. C) the responsiveness of the quantity demanded to changes in price. D) how sensitive the quantity demanded is to changes in demand.

  22. A fall in the price of lemons from $10.50 to $9.50 per bushel increases the quantity demanded from 19,200 to 20,800 bushels. The price elasticity of demand is

  23. A fall in the price of lemons from $10.50 to $9.50 per bushel increases the quantity demanded from 19,200 to 20,800 bushels. The price elasticity of demand is 1.25 B)1.20 C)8.00 D)0.80

  24. A fall in the price of lemons from $10.50 to $9.50 per bushel increases the quantity demanded from 19,200 to 20,800 bushels. The price elasticity of demand is 1.25 B)1.20 C)8.00 D)0.80

  25. If the price elasticity is between 0 and 1, demand is…

  26. If the price elasticity is between 0 and 1, demand is… Inelastic Elastic perfectly elastic D)unit elastic

  27. If the price elasticity is between 0 and 1, demand is… Inelastic Elastic perfectly elastic D)unit elastic

  28. The cross elasticity of demand measures the responsiveness of the quantity demanded of aparticular good to changes in the prices of

  29. The cross price elasticity of demand measures the responsiveness of the quantity demanded of a particular good to changes in the prices of its complements but not its substitutes. B) its substitutes but not its complements. C) its substitutes and its complements. D) neither its substitutes nor its complements.

  30. The cross price elasticity of demand measures the responsiveness of the quantity demanded of a particular good to changes in the prices of its complements but not its substitutes. B) its substitutes but not its complements. C) its substitutes and its complements. D) neither its substitutes nor its complements.

  31. If goods are complements, definitely their elasticity's are…

  32. If goods are complements, definitely their elasticity's are… income elasticities are negative. B) income elasticities are positive. C) Cross price elasticities are positive. D) Cross price elasticities are negative.

  33. If goods are complements, definitely their elasticity's are… income elasticities are negative. B) income elasticities are positive. C) Cross price elasticities are positive. D) Cross price elasticities are negative.

  34. Assume cars and gasoline are complements. When the price of gasoline goes up, which of the following will happen to the quantity for cars?

  35. Assume cars and gasoline are complements. When the price of gasoline goes up, which of the following will happen to the quantity for cars? The equilibrium price of cars will increase. b. The equilibrium quantity of cars will decrease. c. The supply curve for cars will shift to the left. d. The supply curve for cars will shift to the right. e. The demand curve for cars will shift to the right. f. None of the above

  36. Assume cars and gasoline are complements. When the price of gasoline goes up, which of the following will happen to the quantity for cars? The equilibrium price of cars will increase. b. The equilibrium quantity of cars will decrease. c. The supply curve for cars will shift to the left. d. The supply curve for cars will shift to the right. e. The demand curve for cars will shift to the right. f. None of the above

  37. If bread is an inferior good, then what will happen to price and quantity for bread as the consumer income increases?

  38. If bread is an inferior good, then what will happen in the market for bread as the consumer income increases? The quantity will increase. b. The quantity will decrease. c. The price will fall. d. Both a) and c) are correct. e. Both b) and c) are correct.

  39. If bread is an inferior good, then what will happen in the market for bread as the consumer income increases? The quantity will increase. b. The quantity will decrease. c. The price will fall. d. Both a) and c) are correct. e. Both b) and c) are correct.

  40. If the government announces today that a tax increase of 50 cents per pack of cigarettes is to take place in two weeks, what would you expect to happen today to the current market for cigarettes?

  41. If the government announces today that a tax increase of 50 cents per pack of cigarettes is to take place in two weeks, what would you expect to happen today to the current market for cigarettes? The demand for cigarettes would increase. b. The demand for cigarettes would decrease. c. The price of cigarettes would increase. d. Both a) and c) are correct. e. Both b) and c) are correct.

  42. If the government announces today that a tax increase of 50 cents per pack of cigarettes is to take place in two weeks, what would you expect to happen today to the current market for cigarettes? The demand for cigarettes would increase. b. The demand for cigarettes would decrease. c. The price of cigarettes would increase. d. Both a) and c) are correct. e. Both b) and c) are correct.

  43. In Figure 4-2, if the government imposes a price ceiling of $2, the result will be

  44. In Figure 4-2, if the government imposes a price ceiling of $2, the result will be a. equilibrium b. excess supply c. no different than before the price ceiling is imposed d. excess demand e. the demand shifts leftward and supply shifts rightward

  45. In Figure 4-2, if the government imposes a price ceiling of $2, the result will be a. equilibrium b. excess supply c. no different than before the price ceiling is imposed d. excess demand e. the demand shifts leftward and supply shifts rightward

  46. A price ceiling will have no impact on a market if it is set…

  47. A price ceiling will have no impact on a market if it is set… below the equilibrium price b. by knowledgeable government officials c. to maintain parity d. above the equilibrium price

  48. A price ceiling will have no impact on a market if it is set… below the equilibrium price b. by knowledgeable government officials c. to maintain parity d. above the equilibrium price

  49. When a price floor is imposed, it has an impact on a market if it is set…

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