Discussion:
1- in markets prices move toward equilibrium because of the actions of buyers and sellers. why?
2- In general, elasticity is a measure of how much buyers and sellers respond to changes in market conditions. Why?
3- The demand for a good or service is determined by those who buy the good or service. Why?
4- A shortage exists in a market if supply and demand. Why?
5- Holding all other forces constant, if decreasing the price of a good leads to an increase in total revenue, then the demand for the good must be(elastic). Why?
6- Because the demand for wheat tends to be inelastic, the development of a new, more productive hybrid wheat would tend to... decrease the total revenue of wheat farmers. Why?
7- A legal maximum on the price at which a good can be sold is called a price (ceiling). Why?
8- The burden of a luxury tax falls (more on the middle class than on the rice). Why?
9- an increase in demand will cause an increase in price, which will cause an increase in quantity supplied. Why?
10- If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium. True or false? Why?