The Table Below Displays Hypothetical Demand and Supply Schedules for the Market

question 16

Multiple Choice

The table below displays hypothetical demand and supply schedules for the market for overnight parcel deliveries in Canada. $$\begin{array} { | c | c | c | c | c | c | } \hline & \begin{array} { c } \text { Quantity } \\\text { Demanded } \\\text { (millions) }\end{array} && & \begin{array} { c } \text { Quantity } \\\text { Supplied } \\\text { (millions) }\end{array} & \\\hline \text { Price (\$) } & \text { Year 1 } & \text { Year 2 } & & \text { Year 1 } & \text { Year 2 } \\\hline & & & & & \\\hline 30 & 80 & 95 & & 140 & 125 \\\hline 26 & 90 & 105 & & 135 & 120 \\\hline 22 & 100 & 115 & & 130 & 115 \\\hline 18 & 110 & 125 & & 125 & 110 \\\hline 14 & 120 & 135 & & 120 & 105 \\\hline 10 & 130 & 145 & & 115 & 100 \\\hline\end{array}$$ TABLE 3- 3
-At the market- clearing price for a commodity

• A)prices will remain unchanged,even if there is excess demand.
• B)there will never again be any pressure for prices to change,independent of what happens to demand or supply.
• C)shifts in the supply or demand curves will not cause price changes.
• D)the quantity supplied of the commodity equals quantity demanded.
• E)there may be excess demand for a product but not excess supply.

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Definitions:

Deductible Interest

Interest payments on loans (such as mortgage or student loans) that can be subtracted from gross income to reduce taxable income under certain circumstances.

Home Mortgage

A loan provided by a financial institution to a borrower for the purchase of a residential property, secured by the property itself.

Tax-Exempt Securities

Investments whose interest income is not subject to federal income tax, and in some cases, state and local taxes.

Residence Acquisition Debt

Mortgage debt incurred in acquiring, constructing, or substantially improving a principal residence, which is secured by the residence.