Microeconomics 1 Test
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| A. Supply slope is always positiveB. A change in Q smaller than 1% when price changes 1%.
Elasticity<1.C. If a producer thinks price is going to go up, they will reduce the production today in order to make more benefit increasing the production when thr goods price increase. ViceversaD. Seller or buyer, depends on which side is less elasticE. The price "per se" of a goodF. Both cases place a wedge between the price tha buyer buy and seller sell, the only difference is who pays the govermentG. A stop the goverment puts to the price, its the minimum price you can buy/sell a productH. A preference relation is monoton if "the more, the better" applies.
i.e. Bundle A (3,6) > Bundle B (3,5) I. For example weather for agriculture, if the weather isn't favorable the production wil decrease, thus the curve shifts leftJ. The curve shifts to the right if the good is now more liked because for the same prices there are more buyers now. If disliked the curve shifts left, for the same price there are less buyersK. The difference between the amount buyer is willing to pay for a good and the amount he finally paysL. Measures how Q of a good changes when ther price of another good changesM. The price does not affect in the curve, it just moves along the slope. Higher price=higher supply and viceversaN. The budget constraint or budget line is the curve that represents income, price of two goods (x,y) and the quantity I can buy of each of them inside my budget.
Formula is: m=Px*Qx+Py*Qy which expressed in a line ecuation is Qy=(m/Py)-(Px/Py) *xO. The slope is the relative price between x and y (-Px/Py). The cut with axis are (m/Py) in y axis and (m/Px) in axis x, this represents the maximum amount of good x or y, respectively that I can buy.P. Horizontal curveQ. Substitutes: If the price of butter increases, the demand of margarine increases.
Complements: If the price of petrol icreases, the demand of cars decreasesR. In plane x/y, represents the preference relation ">~"
u(A) >=u(B) => A>~BS. E(m)>1T. With a rise in the nº of consumers, the curve shifts right, same price, more buyers.
If the nº of buyer decreases, same price less demand |
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