Figure 4-5 -Refer to Figure 4-5. the Figure Above Represents the Market

question 32

Multiple Choice

Figure 4-5
-Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3

• A) economic surplus is maximized.
• B) not enough consumers want to buy pecans.
• C) the quantity supplied is less than the economically efficient quantity.
• D) the quantity supplied is economically efficient but the quantity demanded is economically inefficient.

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Definitions:

Elasticity of Supply

The measure of how much the quantity supplied of a good changes in response to a change in price.

Income Elasticity

A measure of how much the quantity demanded of a good responds to a change in consumers' income, holding everything else constant.

Housing Demanded

The quantity of residential properties that buyers are willing and able to purchase at a given price level.

Demand Elasticity

A quantification of the effect of price variation on the demand level for a specific good.