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Economics For Today

10th Edition
Tucker
Publisher: Cengage Learning
ISBN: 9781337613040

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BuyFindarrow_forward

Economics For Today

10th Edition
Tucker
Publisher: Cengage Learning
ISBN: 9781337613040
Chapter 3, Problem 8SQ
Textbook Problem
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A surplus occurs when

  1. a. the quantity demanded exceeds the quantity supplied.
  2. b. price is below the equilibrium price.
  3. c. price is at the equilibrium.
  4. d. price is above the equilibrium.

To determine

The occurrence of the surplus in the economy.

Explanation of Solution

The demand curve is the individual demand for the commodity at various prices. Similarly, the total demand curve is the summation of all the individual demand curves of the economy. The surplus is the excess supply in the economy.

Option (d):

When the price level in the economy is higher than the market equilibrium price level, it means that the consumers have to pay above the equilibrium price to consume the commodity. This decreases the demand for the commodity and as a result, the demand would fall below the supply and creates a surplus inventory stock in the market. This means that option ’d’ is correct.

Option (a):

When the quantity demanded of a commodity exceeds the quantity supplied of the economy, it means that there is not enough supply to meet the economic demand of the society...

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Chapter 3 Solutions

Economics For Today
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Ch. 3.A - Suppose Tucker Inc. is willing to sell one gizmo...Ch. 3.A - In an efficient market, deadweight loss is a....Ch. 3.A - Deadweight loss results from a. equilibrium. b....Ch. 3.A - Deadweight loss is the net loss of a. consumer...Ch. 3.A - If the quantity supplied exceeds the quantity...Ch. 3.A - Suppose a consumer is willing to pay 20 for one...Ch. 3.A - Producer surplus measures the value between the...Ch. 3.A - Suppose seller X is willing to sell one good X for...Ch. 3.A - Deadweight loss is the result of a....Ch. 3.A - Deadweight loss is computed as the net of a....Ch. 3.A - Deadweight loss is not the result of a. an...Ch. 3.A - At the equilibrium price, deadweight loss is a....Ch. 3.A - If the quantity demanded exceeds the quantity...Ch. 3.A - As shown in Exhibit A-7, if the market is in...Ch. 3.A - As shown in Exhibit A-7, if the market is in...Ch. 3.A - As shown in Exhibit A-7, if the quantity supplied...Ch. 3.A - As shown in Exhibit A-7, if the quantity supplied...Ch. 3.A - As shown in Exhibit A-7, if the quantity supplied...Ch. 3 - Some people will pay a higher price for brandname...Ch. 3 - Draw graphs to illustrate the difference between a...Ch. 3 - Suppose oil prices rise sharply for years as a...Ch. 3 - Draw graphs to illustrate the difference between a...Ch. 3 - Use supply and demand analysis to explain why the...Ch. 3 - Predict the direction of change for either supply...Ch. 3 - Explain the effect of the following situations: a....Ch. 3 - Explain why the market price may not be the same...Ch. 3 - If a new breakthrough in manufacturing technology...Ch. 3 - The U.S. Postal Service is facing increased...Ch. 3 - There is a shortage of college basketball and...Ch. 3 - Explain the statement People respond to incentives...Ch. 3 - Which of the following causes the demand for...Ch. 3 - Which of the following would not cause market...Ch. 3 - Low-income families consume proportionately more...Ch. 3 - Suppose each of the seven dwarfs buys four mugs of...Ch. 3 - Which of the following increases the supply of...Ch. 3 - With an upward-sloping supply curve, which of the...Ch. 3 - A rightward shift in the demand curve is called...Ch. 3 - A surplus occurs when a. the quantity demanded...Ch. 3 - A shortage occurs when a. the quantity supplied...Ch. 3 - Which of the following decreases supply in the...Ch. 3 - Which of the following results from an increase in...Ch. 3 - There is news that the price of Tuckers Root Beer...Ch. 3 - Which of the following causes a shortage to become...Ch. 3 - Which of the following is true in ski towns such...Ch. 3 - In moving from a shortage toward the market...Ch. 3 - The law of demand is the principle that there is...Ch. 3 - A curve that is derived by summing horizontally...Ch. 3 - A leftward shift in the demand curve is called...Ch. 3 - Under the law of demand, any increase in price...Ch. 3 - The law of supply is the principle that the...Ch. 3 - Exhibit 14 presents supply and demand data for the...Ch. 3 - In Exhibit 14, if the price of video games was...Ch. 3 - In Exhibit 14, at any market price of video games...Ch. 3 - In Exhibit 14, at any market price of video games...Ch. 3 - In Exhibit 14, if there is a shortage of video...

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