ECN 102 Lecture Notes - Lecture 10: Turbotax, Music Download, Tax Preparation In The United States

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redminnow421

22 Dec 2020

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Music download and ipods are compliments of each other. A fall in price of ipods shifts the demand curve for music downloads to the right. The price of downloads is the same, but the quantity demanded is now higher. At any given point the quantity is higher than before. Move down along to a point with lower p, higher. A fall in price of cds shifts demand for music downloads to the left. The quantity supplied of any good is the amount that sellers are willing and able to sell. Law of supply: the claim that the quantity supplied of a good rises when the price of the good rises, other things equal. When prices falls, quantity supplied falls as well. This we say that quantity supplied is positively related to the price of the. Supply comes from the behaviour of sellers good.

Related Questions

a. State the law of supply.

	Quantity supplied rises as price increases, other things are constant. Quantity supplied falls as price decreases, other things are constant.
	Supply increases as price falls. Supply decreases as price rises.
	Supply increases as price increases. Supply decreases as price decreases.
	Quantity supplied rises as price falls, other things constant. Quantity supplied falls as price increases, other things are constant.

b. Why is price directly related to quantity supplied?

	As price rises, consumers substitute other goods whose price has not risen.
	As price rises, suppliers rearrange their activities to supply more of that good to take advantage of the higher price.
	As price falls, suppliers rearrange their activities to supply more of that good to take advantage of the lower price.
	As price rises, suppliers rearrange their activities to supply more of a substitute good to take advantage of the higher price.

silverwhale752

For each case, choose the condition that characterizes demand: elastic demand, inelastic demand, or unit-elastic demand.

a. Total revenue decreases when the price increases.

b. The additional revenue generated by an increase in quantity sold is exactly offset by revenue lost from the fall in price received per unit.

c. Total revenue falls when output increases.

d. Producers in an industry find they can increase their total revenues by coordinating a reduction in industry output.

e. As the price of margarine rises by 20%, a manufacturer of baked goods increases its quantity of butter demanded by 5%. Calculate the cross-price elasticity of demand between butter and margarine. Are butter and margarine substitutes or complements for this manufacturer?

f. After Malia's income increased from $12,000 to $18,000 a year, her purchases of album downloads increased from 10 to 40 downloads a year. Calculate Malia's income elasticity of demand for albums.

g. Expensive restaurant meals are income-elastic goods for most people, including Sanjay. Suppose his income falls by 10% this year. What can you predict about the change in Sanjay's consumption of expensive restaurant meals?

chocolatecamel690

Other things equal, when the price of a good rise, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well. How is the relationship between price and quantity supplied represented?

A. Is represented by a downward-sloping supply curve.

B Is referred to as the law of supply.

C. Applies only to a few goods in the economy.

D. All of the above are correct

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ECN 102 Lecture Notes - Lecture 10: Turbotax, Music Download, Tax Preparation In The United States

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