Suppose the market for potatoes can be expressed as follows: Supply: QS = -20 + 10p Demand: QD = 400 - 20p If the government sets a maximum price of $10 per unit, what will be the quantity demanded and quantity supplied?
What will be an ideal response?
With a maximum price of $10, suppliers will sell only 80 units. (Q = -20 + 10(10 ) = 80 ). But at a price of $10, buyers wish to purchase 200 units: Q = 400 - 20(10 ) = 200. Thus, there will be excess demand of 120 units.
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If a person consumes excessive amounts of a good or service, to the point that their total utility actually begins declining, then that person's marginal utility of the last unit consumed is __________.
A. positive B. negative C. zero D. None of these choices are correct.
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases and the price of CDs increases, her new budget constraint could be
A. CD. B. BD. C. AD. D. Both B and C are correct.
Suppose the S curve for peanuts has shifted to the right and the D curve for peanuts has shifted to the right. Assume further that the S curve has shifted more to the right than the D curve has shifted to the right. Which of the following is the most likely equilibrium impact in the peanut market?
a) P increase, Q decrease b) P increase, Q increase c) P decrease, Q decrease d) P decrease, Q increase e) B and D
Assuming the aggregate supply curve is upward-sloping, which of the following is most likely to occur if the Fed pursues restrictive monetary policy?
A. The equilibrium output will decrease but the price level will stay the same. B. The equilibrium price level and output will both decrease. C. The equilibrium price level and output will both increase. D. The equilibrium price level will decrease but output will stay the same.