question
In a market, the equlibrium condition is given by the following
answer
quantity demanded= quantity supplied
question
A market can be described in the equations Qd=100 - P and Qs=P. What are the equilibrium price and quantity in this market?
answer
the equilibrium price is $50 and the equilibrium quantity is 50 units
question
Tim values treats for his dog at $10 per box, and John values them at $6 per box. If the price of dog treats is $3 per box but only one box is available between these two buyers, then gains from trade will be maximized when:
answer
Tim buys the treats
question
In free markets, surpluses lead to:
answer
to lower (prices)
question
A free market achieves an equilibrium price and quantity due to
answer
the combined actions of buyers and sellers
question
the equilibrium price is
answer
the price that balances quantity supplied and quantity demanded
question
When there is a shortage, sellers have an incentive to
_____ their price and buyers have an incentive to offer a ____ price
_____ their price and buyers have an incentive to offer a ____ price
answer
increase; higher
question
Imagine a free market in which quantity supplied is 50 units and quantity demanded is 40 units at the current price. the market is experiencing a
answer
surplus
question
How did the spread of the internet affect the market for news
answer
supplies increased, causing the price to fall
question
which of the following would cause the current supply of ipods to increase
answer
producers expecting that the future price of ipods will decrease
question
Imagine a free market in equilibrium. After a sudden increase in demand (but before the price can adjust), the market experiences:
answer
a shortage
question
technological advances have increased the supply of digital cameras. As a result the
answer
demand for digital cameras will increase, putting downward pressure on the price
question
Since improved technology continually lowers the cost of discovering and producing oil, how can rising oil prices in recent years be explained
answer
demand has increased by more than supply increased, raising prices
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