5 Steps to a 5 AP Microeconomics, 2014-2015 Edition

Quantity Demanded Versus Demand The law of demand predicts a downward- (or negative) sloping demand curve (Figure 6.1). If the p ...

An increase in demandis viewed as a rightward shiftin the demand curve. There are two ways to think about this shift. a. At all ...

Price of Complementary Goods Two goods are complements if the consumer receives more utility from consuming them together than ...

Example: When the Soviet Union fractured and the Russian government began allowing more foreign investment, corporations such as ...

The Supply Curve A small town has a thriving summer sidewalk lemonade stand industry. Table 6.3 summa- rizes the daily quantity ...

Determinants of Supply Lemonade producers are willing and able to supply more lemonade if something happens that promises to inc ...

supply curve. If kids all over town began using electric lemon squeezers rather than their sticky bare hands, the supply of lemo ...

Table 6.4 QUANTITY QUANTITY DEMANDED SUPPLIED PRICE PER (CUPS (CUPS PRICE CUP ($) PER DAY) PER DAY) Qd–Qs SITUATION SHOULD .25 1 ...

$1.25 per cup, you can see the surplus in Figure. 6.7. Consumers are reluctant to purchase as much lemonade as suppliers are wil ...

When demand increases, equilibrium price and quantity both increase. When demand decreases, equilibrium price and quantity both ...

68 › Step 4. Review the Knowledge You Need to Score High “Use different colored pens when drawing multiple curves on a single gr ...

When both demand and supply are changing, one of the equilibrium outcomes (price or quantity) is predictable and one is ambiguo ...

The area under the demand curve and above the market price is equal to total consumer surplus. 70 › Step 4. Review the Knowled ...

So, is market equilibrium conducive to increasing total welfare for society? Combining Figures 6.14 and 6.15 completes the marke ...

› Answers and Explanations 72 › Step 4. Review the Knowledge You Need to Score High C—If the price of pears rises, either quant ...

Complementary goods:Two goods are consumer complements if they provide more util- ity when consumed together than when consumed ...

CHAPTER 7 Elasticity, Microeconomic Policy, and Consumer Theory IN THIS CHAPTER Summary: It is critical to remember that behind ...

7.1 Elasticity Main Topics: Price Elasticity of Demand, Determinants of Elasticity, Total Revenue and Elasticity, Income Elastic ...

If Ed=1, demand is said to be “unit elastic” for good X. The initial change in the price is exactly equal to, in percentage ter ...

Special Cases If it is true that any increase in the price results in no decrease in the quantity demanded, then we are describi ...