MBA 701- Module 1| QUESTIONS WITH VERIFIED ANSWERS 100% SOLVED| LATEST UPDATE
GUARANTEED PASS
depends on change For the variable E what is the relation to Qd? What is the expected sign?
· Direct relationship between Qs and P, all else equal (P, C, F, Pr, E)
-Qs increased when P rises, all else equal
-Qs decrease when P falls, all else equal What is the Law of Supply?
1)maximum quantity of a good that will be offered for sale for a given price
2)minimum price sellers will accept to offer a specific quantity of the good for sale · a point
on a supply curve shows either:
supply curve always slopes upward
-when price changes
-Movement along original supply curve Changes in quantity supplied occurs
-when one of the other variables (C, F, Pr, etc.) changes
-Occurs when Qs is affected even though P stays the same
-Supply curve shifts right (more) or left (less) Change in supply occurs
left Most extreme sellers are on the __________ hand side/ farthest away from the normal
because they are the supplier who is willing to sell at the lowest price
Market Equilibrium · determined by the intersection of demand and supply curves
, · The price where Qd= Qs
Market Disequilibrium: Excess demand (shortage) -Exists when quantity demanded exceeds
quantity supplied (Qd > Qs)
-At any P < P*
Market Disequilibrium: Excess supply (surplus) -Exists when quantity supplied exceeds
quantity demanded (Qd < Qs)
-At any P > P*
price ___________ adjusts to eliminate excess D or S
Consumer surplus (happiness consumers get) Benefit derived when price is below consumer
willingness to pay (demand curve)
Producer surplus (happiness sellers get) Benefit derived when price is above seller
willingness to sell (supply curve)
Social (or total) surplus -Sum of consumer & producer surplus
-Area below demand curve & above supply curve up to the quantity exchanged
shortage When Demand increase or supply decrease the Original P* will now result in
_____________, pushing P up
surplus When Demand decrease or supply increase the Original P* will now result in
____________, pushing P down
GUARANTEED PASS
depends on change For the variable E what is the relation to Qd? What is the expected sign?
· Direct relationship between Qs and P, all else equal (P, C, F, Pr, E)
-Qs increased when P rises, all else equal
-Qs decrease when P falls, all else equal What is the Law of Supply?
1)maximum quantity of a good that will be offered for sale for a given price
2)minimum price sellers will accept to offer a specific quantity of the good for sale · a point
on a supply curve shows either:
supply curve always slopes upward
-when price changes
-Movement along original supply curve Changes in quantity supplied occurs
-when one of the other variables (C, F, Pr, etc.) changes
-Occurs when Qs is affected even though P stays the same
-Supply curve shifts right (more) or left (less) Change in supply occurs
left Most extreme sellers are on the __________ hand side/ farthest away from the normal
because they are the supplier who is willing to sell at the lowest price
Market Equilibrium · determined by the intersection of demand and supply curves
, · The price where Qd= Qs
Market Disequilibrium: Excess demand (shortage) -Exists when quantity demanded exceeds
quantity supplied (Qd > Qs)
-At any P < P*
Market Disequilibrium: Excess supply (surplus) -Exists when quantity supplied exceeds
quantity demanded (Qd < Qs)
-At any P > P*
price ___________ adjusts to eliminate excess D or S
Consumer surplus (happiness consumers get) Benefit derived when price is below consumer
willingness to pay (demand curve)
Producer surplus (happiness sellers get) Benefit derived when price is above seller
willingness to sell (supply curve)
Social (or total) surplus -Sum of consumer & producer surplus
-Area below demand curve & above supply curve up to the quantity exchanged
shortage When Demand increase or supply decrease the Original P* will now result in
_____________, pushing P up
surplus When Demand decrease or supply increase the Original P* will now result in
____________, pushing P down
