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Practice Questions
Elasticity of Supply Practice Questions
Which of the two goods is more likely to be elastically supplied?
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a. Supply of apples over the next growing season
b. Supply of apples over the next decade
Which of the two goods is more likely to be elastically supplied?
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a. Supply of construction workers in Binghamton, NY
b. Supply of construction workers in New York State
Which of the two goods is more likely to be elastically supplied?
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a. Supply of breakfast cereal
b. Supply of food
Which of the two goods is more likely to be elastically supplied?
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a. Supply of gold
b. Supply of computers
If a new process for manufacturing diamonds is created, will the supply curve for diamonds become more elastic or more inelastic?
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a. More elastic
b. More inelastic
If pesticides and fertilizers are banned, will the supply curve for food become more elastic or more inelastic?
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a. More elastic
b. More inelastic
If a larger share of oil output is required to make plastic, will the supply curve for plastic become more elastic or more inelastic?
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a. More elastic
b. More inelastic
In 1993, then President Clinton passed a law raising income taxes. This tax hike was fully expected: He campaigned on it in 1992. What do you expect happened to executive income in the first year of the tax increases? What about in subsequent years? Hint: Top executives have a lot of power over when they get paid for their work: They can ask for bonuses a bit earlier, or they can cash out their stock options a bit earlier. Literally, this isn’t their “labor supply,” it’s more like their “income supply.”
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a. In the first year income will decrease; in the long run it will decrease
b. In the first year income will decrease; in the long run it will remain nearly the same
c. In the first year income will increase; in the long run it will decrease
d. In the first year income will increase; in the long run it will remain nearly the same
Economist Austen Goolsbee estimated that the short-run elasticity of “income supply” for these executives was 1.4, while the long-run elasticity of “income supply” was 0.1. (Note: Goolsbee used a variety of statistical methods to look for these elasticities, and all came to roughly the same result.) If taxes pushed down their take-home income by 10%, how much would this cut the amount of income supplied in the short run? In the long run?
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a. Short run income would decrease 10%; long run income would decrease 1%
b. Short run income would decrease 14%; long run income would decrease 1%
c. Short run income would decrease 10%; long run income would decrease 2%
d. Short run income would decrease 14%; long run income would decrease 2%
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Principles of Economics Microeconomics
Course
(90 videos)
Introduction
Introduction to Microeconomics
Practice Questions
Supply, Demand, and Equilibrium
The Demand Curve
Practice Questions
The Supply Curve
Practice Questions
The Equilibrium Price and Quantity
Practice Questions
A Deeper Look at the Demand Curve
Practice Questions
The Demand Curve Shifts
Practice Questions
Change in Demand vs. Change in Quantity Demanded
Practice Questions
A Deeper Look at the Supply Curve
Practice Questions
Exploring Equilibrium
Practice Questions
The Supply Curve Shifts
Practice Questions
Does the Equilibrium Model Work?
Practice Questions
Supply and Demand Terminology
Practice Questions
Elasticity and Its Applications
Elasticity of Demand
Practice Questions
Calculating the Elasticity of Demand
Practice Questions
Office Hours: Elasticity of Demand
Practice Questions
Elasticity of Supply
Practice Questions
Elasticity and Slave Redemption
Practice Questions
Applications Using Elasticity
Practice Questions
Taxes and Subsidies
Commodity Taxes
Practice Questions
Who Pays the Tax?
Practice Questions
Tax Revenue and Deadweight Loss
Practice Questions
Subsidies
Practice Questions
Wage Subsidies
Practice Questions
The Price System
I, Rose
A Price Is a Signal Wrapped up in an Incentive
Practice Questions
Markets Link the World
Practice Questions
The Great Economic Problem
Practice Questions
Information and Incentives
Practice Questions
Speculation
Practice Questions
Prediction Markets
Practice Questions
Price Ceilings and Price Floors
Price Ceilings
Practice Questions
Price Ceilings: Shortages and Quality Reduction
Practice Questions
Price Ceilings: Lines and Search Costs
Practice Questions
Price Ceilings: Deadweight Loss
Practice Questions
Price Ceilings: Misallocation of Resources
Practice Questions
Price Ceilings: Rent Controls
Practice Questions
Rent Control in Mumbai
Practice Questions
Price Floors: The Minimum Wage
Practice Questions
Price Floors: Airline Fares
Practice Questions
Why Do Governments Enact Price Controls?
Practice Questions
Price Controls and Communism
Practice Questions
Trade
The Big Ideas of Trade
Practice Questions
Comparative Advantage
Practice Questions
Another Look at Comparative Advantage
Practice Questions
Comparative Advantage Homework
Practice Questions
Tariffs and Protectionism
Practice Questions
Arguments Against International Trade
Practice Questions
Externalities
An Introduction to Externalities
Practice Questions
External Benefits
Practice Questions
Command and Control Solutions
Practice Questions
The Coase Theorem
Practice Questions
Trading Pollution
Practice Questions
A Deeper Look at Tradable Allowances
Practice Questions
Externalities and Incentives: The Economics of COVID
Practice Questions
Costs and Profit Maximization Under Competition
Introduction to the Competitive Firm
Practice Questions
Maximizing Profit Under Competition
Practice Questions
Maximizing Profit and the Average Cost Curve
Practice Questions
Entry, Exit, and Supply Curves: Increasing Costs
Practice Questions
Entry, Exit, and Supply Curves: Constant Costs
Practice Questions
Entry, Exit, and Supply Curves: Decreasing Costs
Practice Questions
Competition and the Invisible Hand
Minimization of Total Industry Costs of Production
Practice Questions
The Balance of Industries and Creative Destruction
Practice Questions
Monopoly
Maximizing Profit Under Monopoly
Practice Questions
Office Hours: Calculating Monopoly Profit
Practice Questions
The Monopoly Markup
Practice Questions
The Costs and Benefits of Monopoly
Practice Questions
Price Discrimination
Introduction to Price Discrimination
Practice Questions
The Social Welfare of Price Discrimination
Practice Questions
Tying
Practice Questions
Bundling
Practice Questions
Labor Markets
The Marginal Product of Labor
Practice Questions
Econ Duel: Is Education Signaling or Skill Building?
Human Capital and Signaling
Practice Questions
The Tradeoff Between Fun and Wages
Practice Questions
Compensating Differentials
Practice Questions
Do Unions Raise Wages?
Practice Questions
Public Goods and the Tragedy of the Commons
Public Goods and Asteroid Defense
Practice Questions
A Deeper Look at Public Goods
Practice Questions
Club Goods
Practice Questions
The Tragedy of the Commons
Practice Questions
Asymmetric Information
Asymmetric Information and Used Cars
Practice Questions
Asymmetric Information in Health Insurance
Practice Questions
Moral Hazard
Practice Questions
Solutions to Moral Hazard
Practice Questions
Signaling
Practice Questions
Consumer Choice
Introduction to Consumer Choice
Practice Questions
Budget Constraints
Practice Questions
Indifference Curves
Practice Questions
Consumer Optimization
Practice Questions
Bonus Topics
Office Hours: Game Theory
Practice Questions
Exam
Principles of Economics: Microeconomics