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Flashcards in Week 4 Deck (11)
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1
Q

True or False: The demand for tyres should be more inelastic than the demand for Michelin brand tyres.

A

True

2
Q

In general, a flatter demand curve is more likely to be

compared to a steeper demand curve

A

price elastic

3
Q

Suppose the equilibrium price for apartments is £500 per month and the government imposes rent controls of £250. Which of the following is likely to occur as a result of the rent controls?

A

There will be a shortage of housing

4
Q

Two goods are said to be substitutes if their cross price elasticity is

A

+

5
Q

Along any straight line demand curve:

A

The price elasticity varies, but the slope remains the same

6
Q

T or F A minimum wage for 17 year olds, set under the market equilibrium wage in the labour market for 17 year olds is an example of a ‘binding price floor’.

A

F

7
Q

T or F: The minimum wage helps all teenagers because they receive higher wages than they would otherwise.

A

F

8
Q

T or F: If medicine is a necessity, the burden of a tax on medicine will probably fall more heavily on the buyers of medicine.

A

T

9
Q

T or F: A 10 per cent increase in the minimum wage is more likely to raise unemployment among teenage workers than among mid-career professional workers

A

T

10
Q

Two goods are said to be complements if their cross price elasticity is

A

-

11
Q

What does the region of mutual advantage represent in an edge worth box diagram?

A

It is the area where all the Pareto preferred points are located. This means that all points here make at least one person better off without making anyone else worse off.