Question

1) Mrs. Y spent about 25 minutes every day to get to work by driving her car. The one-way commute cost her 58.00 in total including parking-while her wages per hour were $12.00. Alternatively, she took the city's subway that cost her $2.00 for a 40-minute commute to work. She noted that the opportunity costs of driving were_ _ and taking the public transportation were respectively. A) $13.00; $14.00 B) S13.00, $10.00 C) $13.00, $14.00 D) $11.00; $10.00 Figure 12: Supply and Demand S1 Prices PAN Exhibit 5A N P3/41 N H A3 B3 GND - Quantity Q3 Q2 Q1 2) Refer to Figure IZ. When market equilibrium points moved from D to E, which one of the followings is true? A) Supply increased and demand increased. B) Quantity supplied increased and quantity demanded decreased. C) Supply remained unchanged and quantity demanded increased. D) Demand increased and quantity supplied increased. 3) Refer to Exhibit 5A. When the market price (P) is above the equilibrium price (P)-in a free and competitive market. there will be a a nd prices tend to move , respectively. A) shortage: up B) surplus; down C) shortage, down D) surplus; up

Please Answer question number 3

Answer 1

Answer to Question 3

When the market price (P) is above equilibrium price (P*) - in a free and competitive market then there will be a surplus and prices tend to move down, respectively.

Explanation - When the market price is above equilibrium price in a free and competitive market then supply will be more than the demand in the market and hence there will be surplus.

In order to increase the quantity demanded, market price will have to reduced.

So the answer is Part B) - surplus ; down.