Economics 25 question/5 image | Baamboozle - Baamboozle

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Assessment

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A government fixes a maximum price for bread. What is the most likely reason for this?

It is a way of supporting low-income families.

Governments provide minimum prices for agricultural products in order to:

stabilise farmers' incomes

Consumer surplus is :

when there is a difference in the price a consumer is willing to pay for a good and its market price.

Producer surplus is:

the difference between what a producer is willing to accept and what is actually paid.

In the diagram, D is the demand curve for a chocolate bar and S is the initial supply. An increase in production causes the supply curve to shift to S1. What is the gain in consumer surplus?

b+e+f

From the diagram, calculate the producer surplus.

$3000

A market is in equilibrium. If there is an increase in supply and no change in demand, how does this affect the equilibrium position?

Equilibrium price falls and equilibrium quantity rises.

A market is in equilibrium. There is then a fall in supply and an increase in demand for the product. How does this affect the equilibrium price and quantity?

The linear demand curve for a product is shown by Qd = 100 – 5p where p is the price in dollars. The linear supply curve is Qs = –20 + 10p. Calculate the equilibrium price of the product.

A market is in disequilibrium when:

A there is excess supply in the market.

What is the relationship between lemons and lemon juice?

Derived demand

A train journey is an example of a derived demand because:

it is necessary in order to get too work.

The price elasticity of supply is:

the percentage change in quantity supplied given a change in price.

The price of a product falls from $5 to $4. As a result, its supply in a given time period falls from 800 units to 700 units. What is the PES?

0.625

A firm supplies 10 units of a product at $48 per unit. If the PES is 4, how many units will the firm supply at a price of $60 per unit?

Which of these estimates of PES is most likely to apply to the supply of raw coffee beans? a)0.1 b)1 c)1.1 d)10