Question

Tabe 4.1 Price per pizza Quantity demanded (pizzas per month) Quantity supplied (pizzas per month) $6 1,000 900 800 700 600 700 750 800 $8 $10 850 $12 900 11. Refer to Table 4.1. If the price per pizza is $10, the price will a. remain constant because the market is in equilibrium. b. increase because there is an excess demand in the market. C. decrease because there is an excess demand in the market d. decrease because there is an excess supply in the market. 12. Refer to Table 4.1. If the price per pizza is $4, the price will a. remain constant because the market is in equilibrium. b. increase because there is an excess demand in the market. C. decrease because there is an excess demand in the market. d. decrease because there is an excess supply in the market. 13. Refer to Table 4.1. This market will be in equilibrium if the price per pizza is a $6. b. $8. c. $10. d. $12. Improvements in technology have reduced the cost of producing personal computers. You accurately predict that in the market for personal computers, there will be a. a decrease in the supply of personal computers, an increase in the price and a decrease in the demand. b. an increase in the quantity supplied of personal computers, a reduction in the price and an increase in the quantity demanded. c. an increase in the supply of personal computers, a reduction in the price and increase in the demand. d. an increase in the supply of personal computers, a decrease in the price and an increase in the quantity demanded. 15. The government imposes a tax to lettuce farmers. You accurately predict that in the market for lettuce, there will be: a. a decrease in the supply of lettuce, an increase in the price and a decrease in the demand. b. an increase in the quantity supplied of lettuce, a reduction in the price and an increase in the quantity demanded. c. an increase in the supply of lettuce, a reduction in the price and increase in the demand.

Answer 1

11) d) decrease because there is excess supply in the market ( at $10 supply > demand )

12) b) increase because there is excess demand in the market ( equilibrium price is $8)

13) b) $8 ( quantity demanded = quantity supplied )

14) d) an increase in supply , a decrease in price and increase in quantity demanded ( cost of production falls so supply rises , this causes market price to fall and quantity to increase )

15) decrease in supply , increase in price , decrease in quantity demanded .