Question

7. Market equilibrium occurs when: A) there is no incentive for prices to change in the market. B) quantity demanded equals quantity supplied. C) the market clears. D) there is no incentive for prices to change in the market, quantity demanded equals quantity supplied, and the market clears. in equilibrium 8. An increase in supply with no change in demand will lead to quantity and in equilibrium price. A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease 9. Consider the market for iPods. What happens if a fantastic new alternative MP3 player is developed and at the same time a boat carrying a large shipment of iPods is attacked by pirates and sunk? A) Price decreases and quantity increases. B) Price increases and quantity increases. C) The change in price is indeterminate and quantity decreases. D) Price increases and the change in quantity is indeterminate. 10. In the market for corn tortilla chips, what would cause a price increase? A) Doctors tell their patients that tortilla chips are unhealthy. B) There is a technological advance in tortilla chip production. C) A fungus kills much of the corn crop in Nebraska. D) The price of salsa triples.

Answer 1

7.

Equilibrium is a condition in which the quantity demanded meets exactly to the quantity supplies on the curve

In this case ,the deadweight loss to the society becomes zero

Answer is option d

In the market equilibrium, the word incentive prices is totally irrelevant

7 in markes equilibrem Derrand intersects Supply 7 P(6) I Derrard Supply Lequilibrum (12) s Supply inmears from S, to sz equilibum Stupts to E, to h equilibrium price z decrease equilibism quentity = increate (B2 )

9. Here we can clearly see that the new alternative MP3 player is launched and iPod carrying ship is totally sunk due to the pirates attack

This will cause more quantity increase of the MP3 player and increase the price of the MP3 player as well according to law of supply

Answer is option B

10.

Since it is a case of increase in supply because price will increase only when supply increases according to law of supply

only option B tells that when there is a technological advancement then there will be a lower production cost and this will increase in the supply

Supply wil increase the price also

If doctor tells the patients that tortilla chips are not good then it will actually decrease the supply and result in to price decrease as well

Only correct answer here is option B