Question

Task #7. Circle the correct (only I in each question) answer 1. An intersection of the market demand and supply curves for a product determines a) The equilibrium price b) The equilibrium quantity c) The price at which there is neither a surplus nor a shortage of the product d) All of the above. 2. If total revenue rises when a price falls, the demand curve is: a) Elastie b) Unitary elastic c) Inelastic d) Any of the above. 3. The demand for a good is more elastic if: a) The greater the number of substitutes for the particular good is available, b) The greater the proportion of income is spent on the good; c) The longer the period of time considered: d) All of the above. 4. Economics studies individuals and organisations in a society engaged in the: a) Production of goods and services: b) Distribution of goods and services; c) Consumption of goods and services; d) All of the above; e) None of the above. tiliun market model

Answer 1

Answer : 1) The answer is option d.

At intersection point of market demand curve and market supply curve with each other the market demand become equal to the market supply. At price level and quantity level if the market demand is equal to the market supply then the price is equilibrium price and the quantity is equilibrium quantity. At equilibrium price level and quantity level neither surplus nor shortage occur. So, as options a, b and c are correct hence the answer is option d.

2) The answer is option a.

In case of elastic demand if price fall then the revenue increase. Because lower price increase the quantity demanded for the good. Therefore, option a is correct.

3) The answer is option a.

If for a particular good many substitutes are available in the market then the demand is more elastic. Because if many substitutes are available in the market then consumers get more choice to purchase the good based on changed price level. Therefore, option a is correct.

4) The answer is option d.

Economics study the consumption, distribution and production of goods and services for individuals and organisations. As options a, b and c are correct hence the answer is option d.