Figure 3.6 -Refer to Figure 3.6. the Figure Above Represents the Market

question 61

Multiple Choice

Figure 3.6

-Refer to Figure 3.6. The figure above represents the market for canvas tote bags. Assume that the price of tote bags is $15. At this price:

• A)the quantity demanded exceeds the quantity supplied of tote bags by 75. The price will eventually rise to $25, where quantity demanded will equal quantity supplied.
• B)the demand exceeds the supply of tote bags by 55.
• C)there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25.
• D)there is a shortage equal to 55 tote bags; the price of tote bags will rise until demand is equal to supply.

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Definitions:

Exports

Items or services that are manufactured in one nation and purchased by consumers in a different country.

Imports

Goods or services brought into a country from abroad for sale or use.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay, representing a measure of consumer benefit.

Tariff

A tax imposed by a government on goods and services imported from other countries, used to control trade.