Ten individuals have $100 and identical preferences for picnics, p, and kayak trips, k, where U(p, k) = k0.5p0.5. The price of picnics is $5 and the price per kayak trip is $ 10. What is the shortage/surplus in the market when the supply of picnics totals 120?
A) There is a surplus of 20.
B) There is a shortage of 20.
C) The market is in equilibrium. Therefore, there is no surplus/shortage.
D) There is not enough information to answer this question.
A
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One would speak of a movement along a supply curve for a good, rather than a change in supply, if
A) prices of substitutes in production change. B) supplier expectations about future prices change. C) the price of the good changes. D) the cost of producing the good changes.
After the transaction in Table 13-1 is completed, what happens to actual reserves, required reserves, and excess reserves? Assume the required reserve ratio is 25 percent
a. Actual reserves increase by $10 million, required reserves increase $2.5 million, and excess reserves increase by $7.5 million. b. Actual reserves decrease by $10 million, required reserves decrease $2.5 million, and excess reserves decrease by $7.5 million. c. Actual reserves increase by $10 million, required reserves are unchanged, and excess reserves increase by $10 million. d. Actual reserves decrease by $10 million, required reserves decrease by $10 million, and excess reserves are unchanged.