12The market equilibrium is found at the: A) price where quantity demanded excee

Question

12The market equilibrium is found at the: A) price where quantity demanded exceeds quantity supplied B) price where quantity demanded equals quantity supplied. C) price where quantity supplied exceeds quantity demanded. D) highest price the market will bear. 13. Assume that corn is an input in the production of beef but not in the production of pork. beef and pork are substitutes in consumption. A decrease in the price of com Further, will A) increase; increase B) decrease; increase C) decrease; decrease D) increase; decrease the supply of beef andthe demand for pork. 14. If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price A) is above the market equilibrium price. B) will rise to clear the market. C) will either rise or remain unchanged. D) is below the market equilibrium price. 15. The typical supply curve illustrates that: A) other things equal, the quantity supplied for a good is inversely related to the price a good. other things equal, the supply of the good creates its own demand for the good. other things equal, the quantity supplied for a good is positively related to the price of a good. price and quantity supplied are unrelated B) C) D) 16. A price control is: control of the price of a good by the firm that produces it. a legal restriction on how high or low a price in a market may go. an upper limit on the quantity of some good that can be bought or sold. a tax on the sale of a good that controls the market price. A) B) C) D) 7. A minimum price set above the equilibrium price is a: A) demand price. B) supply price C) price floor D) price ceiling. Page 3

Explanation / Answer

1- teh market equilibrium is found where the demand and supply of a commodity are equal, because if such condition is there then there is no pressure on prices,

so answer is B

2- here now as the prices of corn are decreased this will increase the supply of beef as the cost of production of beef is decreased thus as the supply of beef is increased due to low cost and thus prices of beef will be low now as as pork being the substitute its demand will fall,

so answer is D

3- now if in any case the supply of the commodity is more than its demand than the prices of that particular product is less than the one that should be in the equilibrium,so answer is D.

4- the supply curve is the curve that shows that there is a direct relation between the price of a product and its quantity supplied,

so answer is C

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