UH Spring 2015 ECON 2304 Chapter 5 Flashcards | Quizlet 28/08/2021, 9:13 PM UH Spring 2015 ECON 2304 Chapter 5 Terms in this set (17) Bill is a professional Bill, because he needs the camera for work and photographer. His camera is has little time to look for alternatives. broken and he needs a new one within the next hour or he will miss an important deadline. Lisa is a high school student who doesn't have a camera but wants to get one to take pictures at her prom next month. Who can be expected to have a higher willingness to pay for a particular camera today? https://quizlet.com/71414951/uh-spring-2015-econ-2304-chapter-5-flash-cards/ Page 1 of 8 UH Spring 2015 ECON 2304 Chapter 5 Flashcards | Quizlet 28/08/2021, 9:13 PM You are in the market for a Seller One because the couch must be removed new couch and found two from her home. advertisements for the kind of couch you want to buy. Seller One notes in her ad that she is selling because she is moving to a smaller apartment and the couch won't fit in the new space. Seller Two says he is selling because the couch doesn't match his other furniture. You will probably get a better deal from: Suppose you are at a flea the seller knows what you're willing to pay and market and are considering will charge you that amount. buying a box of vintage records. You are trying to bargain down the price, but the seller overhears you telling a friend that you are willing to pay up to $50. Once the seller overheard you, your consumer surplus is likely to be lower because: Suppose a market is initially be higher, since the price is lower and will move in equilibrium and supply you down along the demand curve. increases. The consumer surplus will: https://quizlet.com/71414951/uh-spring-2015-econ-2304-chapter-5-flash-cards/ Page 2 of 8 UH Spring 2015 ECON 2304 Chapter 5 Flashcards | Quizlet 28/08/2021, 9:13 PM You currently have a Buyers are forced to reveal their willingness to television that you want to pay. sell. You can either pick a price and try to sell it at a There are more buyers to bid up the price. yard sale or auction it off on eBay. Which of the following might be logical reasons for producer surplus to be higher if you sell on eBay? Suppose a market is initially be lower, since the price is lower and will move in equilibrium and demand you down along the supply curve. decreases. The producer surplus will: Consider the market for increase because both consumer and producer plane tickets to Hawaii. A surplus increase. bad winter in the mainland United States increases demand for tropical vacations, shifting the demand curve to the right. The supply curve stays constant. Total surplus will: https://quizlet.com/71414951/uh-spring-2015-econ-2304-chapter-5-flash-cards/ Page 3 of 8 UH Spring 2015 ECON 2304 Chapter 5 Flashcards | Quizlet 28/08/2021, 9:13 PM You need to paint your with voluntary exchange both parties are better fence but you really hate this off, and are satisfied when accepting the task. You decide to hire the exchange price. kid next door to do it for UH Spring 2015 ECON 2304 Chapter 5 you. You would be willing to Study pay him up to $100, but you start by offering $50, expecting to negotiate. To your great surprise, he accepts your $50 offer. When you tell your friend about the great deal you got, she is shocked that you would take advantage of someone. To assure your friend that you did not cheat the kid next door, you tell her that: New York City has a long- a). inefficient because the quantity supplied will standing policy of be less than the quantity demanded. controlling rents in certain parts of the city—in essence, b). smaller than if there was not market a price ceiling on rent. restriction. a). The market for apartments is likely to be: b). The size of total surplus will be: https://quizlet.com/71414951/uh-spring-2015-econ-2304-chapter-5-flash-cards/ Page 4 of 8 UH Spring 2015 ECON 2304 Chapter 5 Flashcards | Quizlet 28/08/2021, 9:13 PM Total surplus is maximized at the market will adjust to a new equilbrium at the equilibrium price and which total surplus is maximized. quantity. When demand increases, price increases. If the price increases due to an increase in demand, total surplus is still maximized because: When the price of gasoline a). Producer surplus would fall, and individual was very high in the summer consumer surplus may increase or decrease. of 2008, several U.S. presidential candidates b). decrease. proposed implementing a national price ceiling to keep fuel affordable. a). How would this policy have affected producer and consumer surplus? b). This policy would cause total surplus to: Consider a policy to help Some farmers would gain surplus at a higher struggling farmers by setting price but fewer trades would occur and some a minimum trade price for farmers will be unable to trade. wheat. Which of the following statements is true? https://quizlet.com/71414951/uh-spring-2015-econ-2304-chapter-5-flash-cards/ Page 5 of 8 UH Spring 2015 ECON 2304 Chapter 5 Flashcards | Quizlet 28/08/2021, 9:13 PM Rent control creates they think they will be able to find an apartment deadweight loss for both at a lower price. consumers and suppliers of housing. Consumers are often in favor of this policy because: Suppose price is 5 percent luxury good because demand will be more above equilibrium in two elastic. markets: a market for a necessity and a market for a luxury good. All else equal (including supply conditions), you can expect deadweight loss to be greater in the market for the: Your grandmother likes old buyers have more chances of locating the fashioned yard sales and object they want and sellers have more buyers doesn't understand why bidding on an object. everyone is so excited about eBay. You explain to her that the creation of this new market enables people who don't live in the same town to buy and sell used goods, which increases total surplus over the yard sale market. This is because: https://quizlet.com/71414951/uh-spring-2015-econ-2304-chapter-5-flash-cards/ Page 6 of 8 UH Spring 2015 ECON 2304 Chapter 5 Flashcards | Quizlet 28/08/2021, 9:13 PM At Zooey's elementary preventing a market that would generate school, children are not mutually beneficial trades. allowed to trade lunches or components of their lunches with other students. Lunchroom monitors watch closely and strictly enforce this policy. If Zooey prepares an argument about the inefficiency of this policy to her principal, she can say that the school policy is: https://quizlet.com/71414951/uh-spring-2015-econ-2304-chapter-5-flash-cards/ Page 7 of 8 UH Spring 2015 ECON 2304 Chapter 5 Flashcards | Quizlet 28/08/2021, 9:13 PM Assume the market for wine a.Efficient is functioning at its b.Inefficient equilibrium. For each of the c.Efficient following situations, say d.Efficient whether the new market outcome will be efficient or inefficient. a. A new report shows that wine is good for heart health: b. The government sets a minimum price for wine, which increases the current price: c. An unexpected late frost ruins large crops of grapes: d. Grape pickers demand higher wages, increasing the price of wine: https://quizlet.com/71414951/uh-spring-2015-econ-2304-chapter-5-flash-cards/ Page 8 of 8