Consider schedule #1 in the aggregate demand and aggregate supply table given below.The equilibrium output and price level for the economy described on this schedule are:
?
Table 10.1
?
?
$$\begin{array} { c c c c c }
\begin{array} { c }
\text { Quantity of } \
\text { Aggregate Output } \
\text { Demanded }
\end{array} & \begin{array} { c }
\text { Price } \
\text { Level }
\end{array} &\#1& \begin{array} { c }
\text { Quantity of } \
\text { Aggregate Output Supplied } \
\# 2
\end{array} & \# 3 \
\hline \$ 7.0 & 110 & \$ 5.0 & \$ 6.0 & \$ 4.0 \
6.5 & 120 & 5.5 & 6.5 & 4.5 \
6.0 & 130 & 6.0 & 7.0 & 5.0 \
5.5 & 140 & 6.5 & 7.5 & 5.5 \
5.0 & 150 & 7.0 & 8.0 & 6.0
\end{array}$$
?
A)$7.0 and 110,respectively.
B)$6.5 and 120,respectively.
C)$6.0 and 130,respectively.
D)$5.5 and 140,respectively.
E)$5.0 and 150,respectively.

Question

Consider schedule #1 in the aggregate demand and aggregate supply table given below.The equilibrium output and price level for the economy described on this schedule are:
?
Table 10.1
?
?
$$\begin{array} { c c c c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { Aggregate Output } \
\text { Demanded }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { Level }
\end{array} &\#1& \begin{array} { c } 
\text { Quantity of } \
\text { Aggregate Output Supplied } \
\# 2
\end{array} & \# 3 \
\hline \$ 7.0 & 110 & \$ 5.0 & \$ 6.0 & \$ 4.0 \
6.5 & 120 & 5.5 & 6.5 & 4.5 \
6.0 & 130 & 6.0 & 7.0 & 5.0 \
5.5 & 140 & 6.5 & 7.5 & 5.5 \
5.0 & 150 & 7.0 & 8.0 & 6.0
\end{array}$$
?
A)$7.0 and 110,respectively.
B)$6.5 and 120,respectively.
C)$6.0 and 130,respectively.
D)$5.5 and 140,respectively.
E)$5.0 and 150,respectively.

Quizplus · Accepted Answer

The equilibrium output and price level are found where the quantity of aggregate output demanded equals the quantity of aggregate output supplied. In schedule #1, this occurs at a price level of 130 with an aggregate output of $6.0.

Consider Schedule #1 in the Aggregate Demand and Aggregate Supply