Refer to Table 3.1 to answer the following questionTable 3.1 Individual Demand and Supply SchedulesQuantity Demanded byPriceAlejandroBenCarlMarket$8.00842________6.001244________4.002046________2.002246________Quantity Supplied byPriceAveryBrandonCassandra $8.006046________$6.004244________$4.002442________$2.00640________In Table 3.1, if the price is $2, the market will
A. Experience a surplus of 30 units.
B. Experience a surplus of 56 units.
C. Experience a shortage of 22 units.
D. Be in equilibrium.
Answer: C
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Refer to Negative Externality. According to a Pigovian analysis of this externality, when a tax of $5 per unit is imposed on the firms in this industry, the external costs created by the firms' production will equal
The following questions refer to the accompanying diagram, which shows the effects of a negative externality created by an industry's production. The equilibrium quantity in the absence of any attempt to internalize the externality is QE, and the optimal quantity according to a Pigovian analysis is QO.
a. area C + D + E + G + H.
b. area C + D + G + H.
c. area C + G.
d. zero.
Increasing opportunity cost occurs along a production possibilities frontier because
A) resources are not equally productive in all activities. B) increasing wants need to be satisfied. C) in order to produce more of one good decreasing amounts of another good must be sacrificed. D) production takes time.
Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfare is $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfare is $450. If you do not use the frequent-flyer coupon to fly to Miami, should you go to Miami?
A. No, your benefit is less than your cost. B. Yes, your benefit is more than your cost. C. Yes, your benefit is equal to your cost. D. No, because there are no benefits in the trip.
The maximum number of workers hired is
A. 4.
B. 5.
C. 6.
D. 7.