17. (Figure: Market I) Look at the figure Market I. A surplus of the good will r
ID: 3041744 • Letter: 1
Question
17. (Figure: Market I) Look at the figure Market I. A surplus of the good will result if the price is:
$6.$15.$0.$9.
18. (Figure: Market I) Look at the figure Market I. If a price floor of $15 is imposed on this market and the government chooses to purchase the surplus, the government must buy _____ units of the good and spend a total amount of _____ on its purchase.
First graph is for 17, second one below is for 18.
9; $135 10; $150 5; $75 9; $81 Price 22 50 0 595 Quantity FiQure: Mdrket [} Look dt the riuure Market I. A surplus ur tre Quod will result irthe price is; s15. $9 . Figure: Market T Price 22 50 0 515 Quantity Figura: Market ) lok at tha tigura MarktT. t a price tiaoe $15 mpnsed an this markat and tha govemmentcses ta purchase tha suplis, the gnvamment must huy units at the gnod and spand a ttal amount oon its purchase. 9;$135 10; $150 5; 575Explanation / Answer
17) A surplus of the good will occur if supply of the good is greater than demand for the good.
The supply curve, curve S and demand curve, D are in the Figure.
At a price of $15, the Supply curve is greater than the Demand curve.
At Price=$15, the supply of the good seen by the S curve is 15 units and demand for the good seen by the D curve is 5 units.
This is the only option where supply > demand.
Answer: B) $15
18) At the price floor of $15, the supply of the good is 15 units while demand is 5 units.
Therefore the surplus is supply of units - demand of units = 15 - 5 = 10 units
The government has to purchase the 10 units and since the price is $15, the government will have to spend 15x10 = 150$.
Therefore, answer = B) 10, $150
Cheers!
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