AIC the amount of a commodity purchased remains unchanged when the price of anot

Question

AIC the amount of a commodity purchased remains unchanged when the price of another commodity changes, the cross-price elasticity of demand between them is: Question 14 Negative C. Zero D. One Questions 15 and 16 refer to the Figure below 1.50 Cl 100 150 250 350 400 Q Millions of pounds of burritos Question 15: The market is initially in equilibrium at Point B. If demand shifts from D2 to DI and the price of burritos remains constant at $4.00, there will be a million pounds of burritos. A. Surplus of 200 Shortage of 200 Surplus of 100 D. Shortage of 100 Shar ta Q d Question 16: we The market is initially in equilibrium at Point A. If demand shifts from DI to D2 and the price of burritos remains constant at $3.00, there will be a million pounds of burritos. A. Surplus of 150 B. Shortage of 150 C. Surplus of 50 D.) Shortage of 100 O d

Explanation / Answer

Q14. Answer is c. Zero. No change in demand means no response hence degree is zero. Q15. Answer is A. Surplus. Eplanation: As per new demand curve, at price $4, demand is 150 units And supply is 350 units Supply exceeds demand, Surplus of 200 units Q16. Answer is B. Shortage 150 units Explanation: As per new demand curve at price $3, demand is 400 units And supply is 250 units Demand exceeds supply, shortage of 150 units

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