- Refer to the Table Above

question 48

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Price Per } \\\text { Pair }\end{array} & \begin{array} { c } \text { Quantity } \\\text { Demanded }\end{array} & \begin{array} { c } \text { Quantity } \\\text { Supplied }\end{array} \\\hline \text { R20 } & 18 & 3 \\\hline \text { R40 } & 14 & 4 \\\hline \text { R60 } & 10 & 5 \\\hline \text { R80 } & 6 & 6 \\\hline \text { R100 } & 2 & 8 \\\hline\end{array}$$
- Refer to the table above. In the supply and demand schedules for socks shown here, if a price floor of R100 is imposed by the government, there will be a

• A) surplus of socks equal to 8 pairs.
• B) shortage of socks equal to 16 pairs.
• C) surplus of socks equal to 6 pairs.
• D) market clearing quantity of 6 pairs of socks exchanged.

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Definitions:

Rule-of-thumb

A practical principle that is not strictly accurate in all cases but is sufficient for most circumstances.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, indicating the sensitivity of consumers to price changes.

Elastic

Describes a situation where the quantity demanded or supplied of a good responds significantly to changes in its price.

Patent

A legal right granted by a government to an inventor, giving exclusive rights to use, make, and sell an invention for a certain period of time.