In: Economics
Please answer all the ten questio
Question 1
If the Demand is P = 200 - 4Q and the Supply is P=6Q
What is the equilibrium Price and Quantity
Group of answer choices
Q* = 20, P*=120
Q* = 60, P*=10
Q* = 60, P*=200
P* = 25, Q*=1/6
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Question 2
If the Demand is P = 200 - 4Q and the Supply is P=6Q
What is the choke price?
Group of answer choices
60
200
20
4
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Question 3
If the Demand is P = 200 - 4Q and the Supply is P=6Q
What is the CS?
Group of answer choices
800
1200
2400
1600
Question 4
If the Demand is P = 200 - 4Q and the Supply is P=6Q
What is the PS?
Group of answer choices
1200
300
2400
1500
Question 5
If the Demand shifts to the the Left
Group of answer choices
Price will increase and Quantity will increase
Price will decrease and Quantity will increase
Price will increase and Quantity will decrease
Price will decrease and Quantity will decrease
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Question 6
If Supply shifts to the left
Group of answer choices
Price will decrease and Quantity will increasePrice will decrease and Quantity will increase
Price will decrease and Quantity will decrease
Price will increase and Quantity will increase
Price will increase and Quantity will decrease
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Question 7
Which of the following is not illustrated by the Production Possibilities Model
Group of answer choices
Increasing Marginal Cost
Increasing Marginal Product
Opportunity Cost
Scarcity
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Question 8
The Law of Demand says that
Group of answer choices
Supply equals Demand
An increase in price will result in an increase in quantity
Demand is upward sloping
An decrease in price will result in an increase in quantity
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Question 9
If A and B are subsitutes
An decrease in the price of a subsitute (good B) will
Group of answer choices
Result in a lower price for good A
Have no impact on demand for good A
Shift the demand to the right for good A
Shift the demand to the left for good A
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Question 10
If A and B are complements
A decrease in the price of a complement (good B) will
Group of answer choices
Result in a lower price for good A
Have no impact on demand for good A
Shift the demand to the left for good A
Shift the demand to the right for good A
1) Demand curve: P= 200-4Q
Supply Curve: P = 6Q
At equilibrium, Demand = Supply
Therefore, 200-4Q = 6Q
10Q= 200
Q*= 200/10=20.
P*= 6*20=120
The correct option is Q*= 20, P*=120
2) Choke price is the price at which quantity demanded is zero. Therefore we can choke price by setting Q in the demand function equal to zero.
Demand curve: P= 200-4Q.
Putting Q equal to zero, we get
P= 200. ( Choke price)
3) Shown in the picture below.
4) Shown in the picture below.
5) The correct option is 'price will decrease and quantity will decrease'. If the demand curve shifts leftward, both price and quantity demanded will fall.
6) The correct option is ' price will increase and quantity will decrease'. As supply curve shifts leftward causing supply of goods shrink. To meet the demand price will increase and quantity sold will decrease.
7) The correct option is 'scarcity'. PPC is concave to the origin which shows when economy produces more of a good than the production of other good is cut down since the resources are fixed. Thus marginal opportunity cost increases from left to right.
8) The correct option is 'decrease in the price will result in an increase in quantity. The law of demand depicts that there is inverse relationship between price and quantity ie demand curve is downward sloping.
9) The correct option is 'shift the demand to the left for good A'. If two goods are substitutes then fall in the price of good A results in lower demand for good B. Thus the demand curve for good B shifts left.
10) The correcf option is 'shift the demand to the right for good A'. If two goods are complement means they are consumed together. So fall in the price of good B shift the demand of good A to the right.