Refer to Table 3-3. The table contains information about the sorghum market. Use the table to answer the following questions
a. What are the equilibrium price and quantity of sorghum?
b. Suppose the prevailing price is $6 per bushel. Is there a shortage or a surplus in the market?
c. What is the quantity of the shortage or surplus?
d. How many bushels will be sold if the market price is $6 per bushel?
e. If the market price is $6 per bushel, what must happen to restore equilibrium in the market?
f. At what price will suppliers be able to sell 36,000 bushels of sorghum?
g. Suppose the market price is $14 per bushel. Is there a shortage or a surplus in the market?
h. What is the quantity of the shortage or surplus?
i. How many bushels will be sold if the market price is $14 per bushel?
j. If the market price is $14 per bushel, what must happen to restore equilibrium in the market?
a. Equilibrium price = $10; Equilibrium quantity = 20,000 bushels.
b. There is a shortage.
c. Shortage = 30,000 - 8,000 = 22,000 bushels.
d. Quantity sold = 8,000 bushels.
e. Price must rise.
f. At $4 per bushel.
g. There is a surplus.
h. Surplus = 36,000 - 12,000 = 24,000 bushels.
i. Quantity sold = 12,000 bushels.
j. Price must fall.
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Refer to Figure 13-5. The candy store represented in the diagram is currently selling Qa units of candy at a price of Pa. Is this candy store maximizing its profit and if it is not, what would you recommend to the firm?
A) Yes, it is maximizing its profit by charging the highest price possible. B) No, it is not; it should lower its price to Pc and sell Qc units. C) No, it is not; it should lower its price to Pb and sell Qb units. D) No, it is not; since its marginal cost is constant, it should produce and sell as much candy as it can. It should sell Qd units at a price of Pd.
The long-run supply curve of an industry equals the industry's
a. long-run marginal cost curve. b. the horizontal sum of all firms' supply curves at any point in time. c. long-run average cost curve. d. long-run total variable cost curve.
What is the name of the regional trade agreement the United States signed with Canada and Mexico that reduced tariffs and other trade barriers?
a. World Trade Organization b. North American Free Trade Agreement c. General Agreement on Tariffs and Trade d. Trans-Pacific Partnership
A decrease in the marginal tax rates is likely to
A. Increase entrepreneurship. B. Decrease work effort. C. Decrease investment. D. Shift the aggregate supply curve to the left.