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ssume that Qd = 80-2P and Qs = 2P-20, at a price of $20 this market has:A.a

/in /by

Assume that Qd = 80-2P and Qs = 2P-20, at a price of $20 this market has:A.a

shortage of 20 units and the price will go up to reach the equilibrium price

B.a surplus of 20 units and the price will go up to reach the equilibrium price

C.a surplus of 20 units and the price will go down to reach the equilibrium price

D.a urplus of 20 units and the price will go up to reach the equilibrium price

E.There is not enough information to get an answerQUESTION 4

  1. If the price elasticity of demand for a product is |-2|, this implies that
  2. A.if the price increases by 2 percent, the quantity demanded will decrease by 1 percent.
  3. B.if the price increases by $1, the quantity demanded will decrease by 2 units.
  4. C.the change in quantity demanded divided by the change in price is equal to 2.
  5. D.if the price increases by 1 percent, the quantity demanded will decrease by 2 percent.
  6. E.if the price increases 1 unit, the quantity demanded will decrease by 2 units.

Suppose the incomes of buyers in a market for a particular inferior good decrease and there is also a reduction in input prices.

A.Equilibrium output would increase, but the impact on equilibrium price would be ambiguous.

B.Equilibrium price would increase, but the impact on equilibrium output would be ambiguous.

C.Equilibrium output would decrease, but the impact on equilibrium price would be ambiguous.

D.Equilibrium output would decrease, and equilibrium price would decrease.

E.We don’t have enough information to answer this question.

If the equilibrium price increases and the equilibrium output decreases then what must have happened.

A.Demand increased

B.Demand decreased

C.Supply increased

D.Supply decreased

E.None of the above is correct.QUESTION 8

  1. If price elasticity of demand = |-0.5| and price decreases by 10 percent, then
  2. A.demand will increase by 0.5 percent.
  3. B.quantity demanded will increase by 0.5 percent, and the demand is elastic.
  4. C.quantity demanded will increase by 0.5 percent, and the demand is inelastic.
  5. D.quantity demanded will increase by 5 percent, and the demand is elastic
  6. E.quantity demanded will increase by 5 percent, and the demand is inelastic

QUESTION 9

  1. If supply and demand for a good both decrease, which of the following is true?
  2. A.Equilibrium price will increase but we cannot say for sure what will happen to equilibrium quantity.
  3. B.Equilibrium price will decrease but we cannot say for sure what will happen to equilibrium quantity.
  4. C.Equilibrium quantity will increase but we cannot say for sure what will happen to equilibrium price.
  5. D.Equilibrium quantity will decrease but we cannot say for sure what will happen to equilibrium price.
  6. E.Equilibrium price and quantity will both decrease.

QUESTION 10

*Suppose buyers of computers and computer software regard the two goods as complements. Then an increase in the price of computer ssftware will cause a(n)

A-decrease in the equilibrium price of computers and an increase in the equilibrium quantity of computers.

B-increase in the equilibrium price of computers and a decrease in the equilibrium quantity of computers.

C-decrease in the supply of computers and a decrease in the quantity demanded of computers.

D-decrease in the demand for computers and a decrease in the quantity supplied of computers.

Suppose the demand curve is: P = 300 – 2QD and the supply curve is: P = 100 + 3QS. What is the sum of the consumer and producer surplus in the market at the equilibrium price and quantity?

A.$3200

B.$1600

C.$2400

D.$4000

E.Cannot be determined from the information given.

 
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