Deck 4: A: Appendix an Algebraic Approach to Demand, Supply, and Equilibrium

Question 1

Market demand is given as Qd = 200 - 3P.Market supply is given as Qs = 2P + 100.What would result if the market price were $30?  

A) a shortage of 110 
B) a surplus of 110 
C) a surplus of 50 
D) a shortage of 50

Answer 1

 a shortage of 110 

Question 2

Market demand is given as Qd = 100 - 2P.Market supply is given as Qs = P + 10.What would result if the market price were $40?  

A) a shortage of 30 
B) a surplus of 60 
C) a surplus of 30 
D) a shortage of 60

Answer 2

 a surplus of 30 

Question 3

Market demand is given as Qd = 100 - 2P.Market supply is given as Qs = P + 10.What would result if the market price were $20?  

A) a shortage of 30 
B) a surplus of 60 
C) a surplus of 30 
D) a shortage of 60

Answer 3

 a shortage of 30 

Question 4

Market demand is given as QD = 200 - 3P.Market supply is given as QS = 2P + 100.Which legally imposed price would constitute a binding price floor?  

A) $10 
B) $20 
C) $50 
D) $70

Question 5

Market demand is given as Qd = 40 - 2P.Market supply is given as Qs = 2P.In a perfectly competitive equilibrium, what will be price and quantity traded in the market?  

A) Price will be $20, and quantity will be 10. 
B) Price will be $20, and quantity will be 40. 
C) Price will be $10, and quantity will be 20. 
D) Price will be $40, and quantity will be 20.

Question 6

Exhibit 4A-1

Refer to the exhibit.At the equilibrium price, what would consumer surplus be?  

A) $480 
B) $640 
C) $1120 
D) $1280

Question 7

Market demand is given as QD = 100 - 2P.Market supply is given as QS = P + 10.Which legally imposed price would constitute a binding price ceiling?  

A) $10 
B) $30 
C) $40 
D) $60

Question 8

Market demand is given as Qd = 60 - P.Market supply is given as Qs = 3P.What would result if the market price were $30?  

A) a shortage of 60 
B) a surplus of 60 
C) a surplus of 30 
D) a shortage of 30

Question 9

Market demand is given as Qd = 200 - 3P.Market supply is given as Qs = 2P + 100.In a perfectly competitive equilibrium, what will price and quantity be?  

A) Price will be $20, and quantity will be 140. 
B) Price will be $50, and quantity will be 260. 
C) Price will be $100, and quantity will be 300. 
D) Price will be $140, and quantity will be 380.

Question 10

Exhibit 4A-1

Refer to the exhibit.At the equilibrium price, what would producer surplus be?  

A) $480 
B) $640 
C) $1120 
D) $1280

Question 11

Market demand is given as Qd = 100 - 2P.Market supply is given as Qs = P + 10.In a perfectly competitive equilibrium, what will be price and quantity traded in the market?  

A) Price will be $40, and quantity will be 30. 
B) Price will be $35 and quantity will be 30. 
C) Price will be $30, and quantity will be 40. 
D) Price will be $25, and quantity will be 50.

Question 12

Market demand is given as QD = 100 - 2P.Market supply is given as QS = P + 10.Which legally imposed price would constitute a binding price floor?  

A) $60 
B) $45 
C) $30 
D) $15