1 points Save Answer QUESTION 19 The following figure shows the demand and suppl

Question

1 points Save Answer QUESTION 19 The following figure shows the demand and supply curves for a good. The initial demand curve is D1 and the supply curve is S Later, due to an external shock, the demand curve shifts to D2 Price (S) 10 20 30 35 50 Quantity (units) Refer to the figure above. After the demand curve shifts to D2, if the price is held below the new equilibrium, then: the quantity demanded will be greater than the quantity supplied. O there will be zero deadweight loss Othe quantity demanded will equal the quantity supplied Othe quantity demanded will be less than the quantity supplied QUESTION 20 1 points Save Answer Which of the following statements is true? O The incentive problem and the coordination problem lead to lower efficiency in market economies. OCommand economies do a better job at maximizing social welfare in comparison to market economies. Bringing economic agents together to trade is easier in command economies in comparison to market economies. OCentral planners in command economies have to make decisions that prices would have automatically made in market economies.

Explanation / Answer

1) Price will held below the new equilibrium if demand curve shift left and then equilibrium quantity will be less than the previous one.

2)

3) If negetive extarnality present in the market then the company has to pay tax for their product and price will be greater than the socialy optimal level.

4) Total welafare can be increase by producing more than Q1

5) Neighbour has to pay any amount between 3000 and 5000

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