In the circular flow diagram everyone's expenditure is someone else's receipt.
Answer the following statement true (T) or false (F)
True
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You are given the following market data for apples
Demand is represented by: P = 12 - 0.01Q Supply is represented by: P = 0.02Q where P= price per bushel, and Q=quantity. a. Calculate the equilibrium price and quantity. b. Suppose the government guaranteed producers a price of $10 per bushel. What would be the effect on quantity supplied? Provide a numerical value. c. By how much would the $10 price change the quantity of apples demanded? Provide a numerical value. d. Would there be a shortage or surplus of apples? e. What is the size of this shortage or surplus? Provide a numerical value.
Refer to the above figure. Other things being equal, when the government imposes a price floor at P2, then we would expect
A) the quantity demanded is Q2. B) a surplus will occur. C) price to decline until an equilibrium is achieved at P0. D) consumers to bid against each other for goods and force the price even higher.
One of the necessary conditions for price discrimination to occur is that:
a. buyers in different markets have different elasticities of demand. b. the demand curve is upward sloping. c. buyers must be allowed to resell the good at a higher price elsewhere. d. all of these are necessary for price discrimination to occur.
Under a balanced budget policy, a sharp decline in GDP will cause
A. no serious budget changes. B. a tax cut or an increase in expenditures. C. a tax increase or expenditure cut. D. tax receipts to exceed government expenditures.