Q2 Silid vs Silid

Law of Demand

10

True or False. An increase in the number of people living in a specific area will result in an expansion in demand in that particular market.

False

(expansion in demand happens when price decreases resulting to increase in demand)

20

These type of related commodities increases demand when price of the other decreases.

Complementary Goods

30

This table depicts individual demand for the relationship between the quantity purchased and the price of a commodity while keeping other factors constant. 

demand schedule

40

What will happen to the equilibrium price of mango if market size increases while supply decreases due to a recent typhoon in the region?

Choices: increases, decreases, indeterminate

increases

50

What will happen to the equilibrium quantity if demand decreases while supply increases? 

Choices: increases, decreases, or indeterminate

indeterminate

Explanation:

i.Decrease in demand decreases quantity

ii. Increase in supply increases quantity

Law of Supply

10

What factor/s would result in either contraction or extension of supply?

Price

20

True or False. There is a direct relationship between the price of one good and the quantity of its substitute-in-production.

False

30

This government policy is a financial assistance extended to specific sectors or industries that aims to lower production costs.

Subsidy

40

This refers to a type of commodity in which the production of one good does not exclude the production of the other.

Complement-in-production

50

What will happen to equilibrium price and quantity if there is an increase in both demand and supply for chicken eggs, ceteris paribus?

choices: increase, decrease, indeterminate (answers for P and Q may differ)

P*? , Q*↑

●Equilibrium quantity increases

●Equilibrium price is ambiguous or indeterminate because:

i.Increase in demand raises price

ii. Increase in supply lowers price

Equilibrium/ Disequilibrium

10

State the demand and supply functions with price as the only consideration.

Qd = a - bP

Qs = c + dP

20

This happens when quantity supplied is greater than quantity demanded.

Surplus

30

Determine the impact of the following situation on the market of the good underlined in each case. 

Face masks have been required by the government to be used by people when going out. What happens to the demand and supply curves?

Demand curve: shifts to the right

Supply curve: stays the same

40

Get the equilibrium price and quantity of the following demand and supply functions: Qd=1500-3P and Qs=900+5P

P* = 75

Q* = 1275

50

Assuming that the demand and supply functions for lomo cards are Qd=400 - 4Px and Qs=280 + 8px:

At the old equilibrium price, how much will the disequilibrium be if the supply curve shifts where Qs₂=210 +8Px? Specify whether it is a shortage or surplus.

Shortage by 70 units 

(Explanation: Qs₁ = 360 = Qd_1; Qs₂ = 290; Qs₂ < Qd₁)

Elasticity

10

How are two goods related when the cross-price elasticity of demand is negative?

Complementary

20

What type of price elasticity of demand has a demand curve that slopes more vertically?

Inelastic Demand

30

What type of commodity has an income elasticity of demand  of 0 < E_Y < 1?

Normal necessity

40

Find the Price Elasticity of Supply for Good A if Q_s1=8 and P_s1=P6, and Q_s2=4 and P_s2=P4.

Es=1.667, Elastic

50

Identify whether Good Day and Good Night are complements or substitutes:

Good Day: (P1=10, Q1=40) and (P2=10, Q2=50)

Good Night: (P1=20, Q1=50) and (P2=30, Q2=30)

E_DN=0.56; Good Day and Good Night are substitutes