1. Refer to Table 4-2. In the table shown, the equilibrium price and quantity would be:

Question

Question

A. $50, 6

B. $40,9

C. $30, 12

D. $10, 15

2. Refer to Table 4-2. In the table shown, suppose the current price was $20. This would mean:

A. a surplus of 7 units would exist and price would tend to fall

B. a shortage of 7 units would exist and price would tend to fall

C. a surplus of 7 units would exist and price would tend to rise

D. a shortage of 7 units would exist and price would tend to rise

Answer 1

Answer #1

1. Option C. It is at the intersection of quantity demanded and quantity supplied

2. Option D. At price of 20, Quantity demanded is 15 and supplied is 8 which results in shortage of 7 (8-15=-7), hence the price tends to rise.

Answer 2

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