Micro Unit 2 Summary- Supply and Demand NEW!!!

This video provides a comprehensive summary of microeconomics unit 2, covering demand, supply, elasticity, equilibrium, government intervention, and international trade. It explains key concepts like demand and supply shifters, elasticity types, consumer and producer surplus, and the effects of price ceilings, floors, and taxes. The video also discusses international trade's impact on surplus and tariffs, preparing students for exams.

What is the primary focus of this microeconomics unit summary video?

• Advanced microeconomic theories

• Detailed analysis of economic history

• Summary of key microeconomic concepts

• Introduction to macroeconomics

Which of the following is NOT a reason for the downward slope of the demand curve?

• Substitution effect

• Income effect

• Law of diminishing marginal utility

• Increase in production costs

What does an upward sloping supply curve indicate?

• Inverse relationship between price and quantity supplied

• Constant relationship between price and quantity supplied

• Direct relationship between price and quantity supplied

• No relationship between price and quantity supplied

Which type of elasticity measures how sensitive quantity demanded is to a change in price?

• Elasticity of demand

• Cross-price elasticity

• Elasticity of supply

• Income elasticity

What does a perfectly inelastic demand curve imply?

• Quantity demanded changes significantly with price changes

• Quantity demanded changes slightly with price changes

• Quantity demanded does not change with price changes

• Quantity demanded is equal to quantity supplied

What is consumer surplus?

• The difference between what consumers are willing to pay and what they actually pay

• The total amount consumers pay for a product

• The difference between the price and the cost of production

• The total revenue generated by producers

What happens when a price ceiling is set above equilibrium?

• It increases consumer surplus

• It has no effect on the market

• It creates a surplus

• It creates a shortage

In the context of taxes, what does a tax wedge represent?

• The vertical distance between supply curves due to a tax

• The total tax revenue collected by the government

• The difference between consumer and producer surplus

• The horizontal distance between demand curves due to a tax

How does a tariff affect consumer and producer surplus?

• Increases consumer surplus and decreases producer surplus

• Decreases consumer surplus and increases producer surplus

• Has no effect on either surplus

• Increases both consumer and producer surplus

What is the result of a double shift in supply and demand curves?

• Both price and quantity are indeterminate

• Price is indeterminate, quantity changes

• Quantity is indeterminate, price changes

• Both price and quantity remain constant