Suppose That the Demand and Supply Curves for Green Peas

question 33

Multiple Choice

Suppose that the demand and supply curves for green peas are given by Q^D = 10 - 8P and Q^S = 2P, where P is price per pound and Q is measured in thousands of pounds. If the price per pound of peas is $0.50, the market _____, so the price will _____.

• A) has excess demand of 3,000 pounds; rise
• B) has excess supply of 1,000 pounds; fall
• C) is in equilibrium; remain unchanged
• D) has excess demand of 5,000 pounds; rise

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Definitions:

Minimum Wage

The lowest legal wage that can be paid to most workers.

Unskilled Workers

Laborers who have limited or no special skills or training, often employed in relatively simple tasks.

Difficult Time

A period characterized by challenges, adversities, or hardships that individuals, groups, or entities face.

Quantity Controls

Government-imposed limits on the amount of a good that can be produced or sold in a market.