Exam 3: The Concept of Elasticity and Consumer and Producer Surplus

When there is a decrease in the price of a good

Without a belief that the market has failed, which of the following will result in deadweight loss?

If one person's enjoyment of a good is reduced when another person consumes the good then the good exhibits

The cross price elasticity for peanut butter for a change in the price of jelly is likely to be

-In Figure 3.2, what is the consumer surplus?

A good like water has few substitutes and takes up little of our income to purchase, as a result its demand is likely to be

The income elasticity of demand is (mathematically)

If the price of a good increases by 10% and the quantity demanded decreases by 5%, then at that price, the good is

Because there are many brands of similarly tasting light beers, the elasticity of demand for any one of them is likely to be

The cross price elasticity of demand is (mathematically)the

Suppose a dyke is constructed in a river city to prevent floods from affecting the city. In this way all occupants are made equally safe regardless of whether they pay taxes. Which characteristics of goods hold or do not hold.

If a good is a luxury the income elasticity of demand must be

-In Figure 3.2, what is the money the consumer pays the producer?

Because most people spend a very small fraction of the income on tap water, it is likely to be

For a given decrease in supply, the condition of demand that will result in the most significant change in price is when demand is

A decrease in supply will increase prices most when demand is

If the price of a good increases by 5% and the quantity demanded decreases by 5%, then at that price, the good is

The net gain to society from the operation of a competitive market in equilibrium is

A pure private good is such that

A pure public good is such that