Question

Q1;Consider the following markets in the United States: Alarm Clocks, Art Gallery Visits, LED Lights, Inflatable Pools. Which order is most likely ranked from the biggest percentage increase in sales to the biggest percentage decrease in sales due to COVID-19?

		Alarm Clocks, Art Gallery Visits, LED Lights, Inflatable Pools.
		Inflatable Pools, LED Lights, Alarm Clocks, Art Gallery Visits.
		Inflatable Pools, Alarm Clocks, LED Lights, Art Gallery Visits.
		LED Lights, Inflatable Pools, Alarm Clocks, Art Gallery Visits.

Q30:

Consider the following markets in the United States: Cigarette Deliveries, Audiobooks, Pet Sitters, Eyeliner. Which order is most likely ranked from the biggest percentage increase in sales to the biggest percentage decrease in sales due to COVID-19?

Cigarette Deliveries, Audiobooks, Pet Sitters, Eyeliner.
		Audiobooks, Cigarette Deliveries, Pet Sitters, Eyeliner.
		Cigarette Deliveries, Audiobooks, Eyeliner, Pet Sitters.
		Audiobooks, Cigarette Deliveries, Eyeliner, Pet Sitters.

Q31:

A price floor set above the equilibrium price will NOT result in a/an

		surplus due to excess quantity supplied.
		deadweight loss.
		efficient outcome.
		decrease in consumer surplus.

Answer 1

1. A. Inflatable Pools, LED Lights, Alarm clocks and Art gallery Visits

Reason: The Art Gallery Sales would be most affected due to the scenario of pandemic and lockdown retrictions, this would definetely adversly impact the sales of the art galleries.So it will come at last rank. On the basis of this we can eliminate the first option. The Corona pandemic has been ongoing from the month of march ( mainly). In between the country experienced summer season. As a result of this along with the fact that people could not enjoy going to beaches and remained restricted at home, the sales of the inflatable pools would have increased the most. This eliminates the last option. Also, in the summer season we see a peak in the demand for energy consumption. This will make people opt for more energy saving choices, which could have positively boosted the demand for LED. The demand for alarm clock would not have increased much thats why its third in the rank.

30. C. Cigarettes, Audiobooks, Eyeliners, Pet Sitters.

Reason: Those who consume Cigarettes are habitual smokers and due to lockdown restrictions and safety concerns, the demand for cigerettes deliverables must have increased. Since lockdown and pandemic both has increased the relevance of digital platforms, be it ecommerce or entertainment shows, people are turning digital in terms of preferences when it comes to books as well. This is beacuse, just like web streaming platforms, the audio book platforms are giving lucrative choices to the readers with the wide variety of book choices. Hence the sale of the audiobooks must have increased as people are restricted within the confines of their home and seek some entertainment. The Pet sitters would have faced the plunge in demand, as people are now working from their home and are able to take care of their pets themselves.

31. C. Efficient Outcome

Reason: Usually price floors imposed by the governments create market inefficiencies due to which the market is unable to have a level of equilibium creating deadweight loss. Setting the price floor above the equilibrium price will lead to excess supply over demand and would reduce the consumer surplus in the market and since the price floor will make the market allocatively inefficient, it will also create dead weight loss.