Question

Microeconomics

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Table 1

Price	Quantity Demanded	Quantity Supplied
$10	10	60
$8	20	45
$6	30	30
$4	40	15
$2	50	0

1   Refer to Table 1. The equilibrium price and quantity, respectively, are

a.	$2 and 50.
b.	$6 and 30.
c.	$6 and 60.
d.	$12 and 30.

2. .   Refer to Table 1. If the price were $8, a

a.	shortage of 20 units would exist and price would tend to rise.
b.	surplus of 25 units would exist and price would tend to fall.
c.	shortage of 25 units would exist and price would tend to rise.
d.	surplus of 45 units would exist and price would tend to fall.

3.     Refer to Table 1 If the price were $4, a

a.	surplus of 15 units would exist and price would tend to fall.
b.	shortage of 25 units would exist and price would tend to rise.
c.	surplus of 25 units would exist and price would tend to fall.
d.	shortage of 40 units would exist and price would tend to rise.

Table 2

A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supplyschedules are as follows:

Price	Quantity Demanded by Members	Quantity Demanded by Non-members	Quantity Supplied
$10	1000	500	600
$15	800	400	600
$20	600	300	600
$25	400	200	600
$30	200	100	600

4.     Refer to Table 2. If only members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price?

a.	$10
b.	$15
c.	$20
d.	$25

5.     Refer to Table 2 If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price?

a.	$10
b.	$15
c.	$20
d.	$25

Answer 1

Answer : 1) The answer is option b.

At $6 price level the quantity demanded, 30, is equal to the quantity supplied, 30. Hence the equilibrium price is $6 and the equilibrium quantity is 30. Therefore, option b is correct.

2) The answer is option b.

At $8 price the quantity demanded is 20 and quantity supplied is 45. So, surplus = quantity supplied - quantity demanded = 45 - 20 = 25. Therefore, the market faces surplus of 25 at price level $8. Due to excess supply or surplus the price level lead to fall. Therefore, option b is correct.

3) The answer is option b.

At $4 price level the quantity demanded is 40 and quantity supplied is 15. So, shortage = quantity demanded - quantity supplied = 40 - 15 = 25. Therefore, the market faces shortage of 25 at $4 price level. Due to excess demand or shortage the price level lead to rise. So, option b is correct.

4) The answer is option c.

When the market has only members' demand for tickets then at $20 price level the quantity demanded, 600, is equal to quantity supplied, 600. Hence in this case the equilibrium price is $20. Therefore, option c is correct.

5) The answer is option d.

When the market has both members and non-members' demand then at $25 price level the total quantity demanded is (400 + 200) = 600 which is equal to quantity supplied 600. Hence in this case the equilibrium price is $25. Therefore, option d is correct.