Question 1

If a scalper for the Super Bowl is able to charge $10,000 for a front-row seat, this suggests that
A)at the regular price, there is a surplus of Super Bowl tickets.
B)at the regular price, there is a shortage of Super Bowl tickets.
C)at the regular price, the quantity of Super Bowl tickets demanded equals the quantity supplied.
D)the scalper is making the football fan worse off.

Accepted Answer

If a scalper is able to charge such a high price for a front-row seat, it implies that the demand for Super Bowl tickets exceeds the supply at the regular price, indicating a shortage. The scalper's ability to charge such a high price is possible only because there are not enough tickets available at the regular price. Therefore, the answer is B.

Question 2

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.
A)decrease; increase
B)decrease; decrease
C)increase; decrease
D)increase; increase

Accepted Answer

A shortage in the market typically leads to higher prices as the demand exceeds the supply. Conversely, a surplus, where supply exceeds demand, tends to lead to lower prices as sellers try to offload excess inventory.

Question 3

Given a market equilibrium point, explain, using the concepts of demand and supply, how it is achieved.

Accepted Answer

The answer of Given a market equilibrium point, explain, using...

Question 4

Suppose a shortage for good X exists. Given this information, we know that
A)the price of good X will tend to rise toward the equilibrium level.
B)the price of good X will tend to fall toward the equilibrium level.
C)a government price floor should be imposed above the current price so that the market can work more effectively.
D)a government price ceiling should be imposed above the current price so that the market can work more effectively.

Accepted Answer

In a shortage, demand for the good exceeds supply, which puts upward pressure on the price. As a result, the price of good X will tend to rise toward the equilibrium level as market forces adjust to balance supply and demand. Choices C and D suggest government intervention, which is not necessarily the best solution in all cases. Choice B is incorrect because a shortage would not cause prices to fall; that would be more likely in a situation where supply exceeds demand (i.e., a surplus).

Question 5

"A shortage is the same thing as scarcity." Do you agree or disagree with this statement?
 Why?
 What can cause a shortage to disappear in a market?
 What can cause scarcity to disappear?

Accepted Answer

The answer of "A shortage is the same thing as...

Question 6

The demand for orthodontists' services falls as the proportion of the population that obtains braces falls. It may take several years before the new long-run equilibrium for the orthodontic labor market is attained. In the meantime, the orthodontic labor market experiences a
A)shortage.
B)quality decrease.
C)surplus.
D)excess demand.

Accepted Answer

The decrease in demand for orthodontists' services leads to a surplus of orthodontists in the labor market. This means that there are more orthodontists than there are available jobs, which can lead to higher levels of competition and potentially lower wages for orthodontists.

Question 7

At the market clearing price
A)there is neither a shortage nor a surplus.
B)quantity supplied equals quantity demanded.
C)the supply and demand curves intersect.
D)all of the above are correct.

Accepted Answer

At the market clearing price, there is neither a shortage nor a surplus, which means that quantity supplied equals quantity demanded. This is represented by the point where the supply and demand curves intersect. Therefore, all of the above statements are correct.

Question 8

How is the equilibrium price determined?
 What happens if the price is above the equilibrium price?
 What happens if the price is below the equilibrium price?

Accepted Answer

The answer of How is the equilibrium price determined?
 What...

Quiz 3: Demand and Supply

If a scalper for the Super Bowl is able to charge $10,000 for a front-row seat, this suggests that

A shortage creates a situation that forces prices to while a surplus creates a situation that forces prices to .

Given a market equilibrium point, explain, using the concepts of demand and supply, how it is achieved.

Suppose a shortage for good X exists. Given this information, we know that

"A shortage is the same thing as scarcity." Do you agree or disagree with this statement? Why? What can cause a shortage to disappear in a market? What can cause scarcity to disappear?

The demand for orthodontists' services falls as the proportion of the population that obtains braces falls. It may take several years before the new long-run equilibrium for the orthodontic labor market is attained. In the meantime, the orthodontic labor market experiences a

At the market clearing price

How is the equilibrium price determined? What happens if the price is above the equilibrium price? What happens if the price is below the equilibrium price?