Eco 561 Week One Knowledge Check
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Knowledge Check Week 1
The material presented below is not meant to be a comprehensive list of all you need to know in the content area. Rather it is a starting point for building your knowledge and skills. Additional study materials are recommended in each area below to help you master the material.
Personalized Study Guide Results:
Score: 11 / 12 Concepts Pricing Decisions 100% Mastery
• • • • • • • • • • • •
Questions 1 2 3 4 5 6 12 7 8 9 10 11
Market Systems
100%
Market Equilibrium
80%
Concept: Pricing Decisions
Mastery 100% Questions
• • •
1 2 3
Materials on the concept:
• • • •
Producer Surplus The Total-Revenue Test Consumer Surplus Consumer and Producer Surplus
•
Elasticity, Consumer Surplus, and Producer Surplus
Show More 1 . Revenue increases when
• • • •
A. producer surplus increases B. producer surplus decreases C. consumer surplus increases D. consumer surplus decreases
Correct : Producer surplus is the difference between the minimum price the producer is willing to receive and what they actually receive. The surplus is their profit, and the larger the surplus, the greater their profit on the good. When it decreases, the producer receives a price closer to the minimum acceptable. The consumer surplus measures what the consumer is willing to pay and that price’s difference from the market price. The closer to the market price, the higher the consumer surplus, as consumers are spending less than they are willing to, and the less spent, the lower the revenue will be for the good. Materials
•
Producer Surplus
2 . An increase in the price of an inelastic good
• • • •
A. decreases revenues B. decreases the percentage change in quantity less than the percentage change in price C. increases revenues D. increases the percentage change in quantity more than the percentage change in price
Knowledge Check Week 1
The material presented below is not meant to be a comprehensive list of all you need to know in the content area. Rather it is a starting point for building your knowledge and skills. Additional study materials are recommended in each area below to help you master the material.
Personalized Study Guide Results:
Score: 11 / 12 Concepts Pricing Decisions 100% Mastery
• • • • • • • • • • • •
Questions 1 2 3 4 5 6 12 7 8 9 10 11
Market Systems
100%
Market Equilibrium
80%
Concept: Pricing Decisions
Mastery 100% Questions
• • •
1 2 3
Materials on the concept:
• • • •
Producer Surplus The Total-Revenue Test Consumer Surplus Consumer and Producer Surplus
•
Elasticity, Consumer Surplus, and Producer Surplus
Show More 1 . Revenue increases when
• • • •
A. producer surplus increases B. producer surplus decreases C. consumer surplus increases D. consumer surplus decreases
Correct : Producer surplus is the difference between the minimum price the producer is willing to receive and what they actually receive. The surplus is their profit, and the larger the surplus, the greater their profit on the good. When it decreases, the producer receives a price closer to the minimum acceptable. The consumer surplus measures what the consumer is willing to pay and that price’s difference from the market price. The closer to the market price, the higher the consumer surplus, as consumers are spending less than they are willing to, and the less spent, the lower the revenue will be for the good. Materials
•
Producer Surplus
2 . An increase in the price of an inelastic good
• • • •
A. decreases revenues B. decreases the percentage change in quantity less than the percentage change in price C. increases revenues D. increases the percentage change in quantity more than the percentage change in price