CHAPTER 16: Equilibrium
MULTIPLE CHOICE
1. This problem will be easier if you have done Problem 3. The inverse demand function for grapefruit is
defined by the equation p = 282 − 9q, where q is the number of units sold. The inverse supply function
is defined by p = 7 + 2q. A tax of $22 is imposed on suppliers for each unit of grapefruit that they sell.
When the tax is imposed, the quantity of grapefruit sold falls to
a.
25.
b.
14.
c.
21.
d.
23.
e.
24.
2. This problem will be easier if you have done Problem 3. The inverse demand function for grapefruit is
defined by the equation p = 145 − 6q, where q is the number of units sold. The inverse supply function
is defined by p = 5 + 4q. A tax of $20 is imposed on suppliers for each unit of grapefruit that they sell.
When the tax is imposed, the quantity of grapefruit sold falls to
a.
9.
b.
10.
c.
14.
d.
12.
e.
13.
3. This problem will be easier if you have done Problem 3. The inverse demand function for grapefruit is
defined by the equation p = 317 − 6q, where q is the number of units sold. The inverse supply function
is defined by p = 5 + 6q. A tax of $48 is imposed on suppliers for each unit of grapefruit that they sell.
When the tax is imposed, the quantity of grapefruit sold falls to
a.
20.
b.
18.
c.
22.
d.
26.
e.
24.
4. This problem will be easier if you have done Problem 3. The inverse demand function for grapefruit is
defined by the equation p = 136 − 4q, where q is the number of units sold. The inverse supply function
is defined by p = 16 + 4q. A tax of $16 is imposed on suppliers for each unit of grapefruit that they
sell. When the tax is imposed, the quantity of grapefruit sold falls to
a.
13.
b.
11.
c.
11.
d.
15.
e.
14.
5. This problem will be easier if you have done Problem 3. The inverse demand function for grapefruit is
defined by the equation p = 122 − 4q, where q is the number of units sold. The inverse supply function
is defined by p = 8 + 2q. A tax of $12 is imposed on suppliers for each unit of grapefruit that they sell.
When the tax is imposed, the quantity of grapefruit sold falls to
a.
15.
b.
13.
c.
19.
d.
17.
e.
18.
6. In a crowded city far away, the civic authorities decided that rents were too high. The long-run supply
function of two-room rental apartments was given by q = 17 + 4p and the long-run demand function
was given by q = 304 − 5p, where p is the rental rate in crowns per week. The authorities made it
illegal to rent an apartment for more than 27 crowns per week. To avoid a housing shortage, the
authorities agreed to pay landlords enough of a subsidy to make supply equal to demand. How much
would the weekly subsidy per apartment have to be to eliminate excess demand at the ceiling price?
a.
5.50 crowns
b.
8 crowns
c.
11 crowns
d.
22 crowns
e.
16.50 crowns
7. In a crowded city far away, the civic authorities decided that rents were too high. The long-run supply
function of two-room rental apartments was given by q = 15 + 3p and the long-run demand function
was given by q = 237 − 3p, where p is the rental rate in crowns per week. The authorities made it
illegal to rent an apartment for more than 30 crowns per week. To avoid a housing shortage, the
authorities agreed to pay landlords enough of a subsidy to make supply equal to demand. How much
would the weekly subsidy per apartment have to be to eliminate excess demand at the ceiling price?
a.
14 crowns
b.
7 crowns
c.
11 crowns
d.
28 crowns
e.
21 crowns
8. In a crowded city far away, the civic authorities decided that rents were too high. The long-run supply
function of two-room rental apartments was given by q = 18 + 3p and the long-run demand function
was given by q = 267 − 4p, where p is the rental rate in crowns per week. The authorities made it
illegal to rent an apartment for more than 27 crowns per week. To avoid a housing shortage, the
authorities agreed to pay landlords enough of a subsidy to make supply equal to demand. How much
would the weekly subsidy per apartment have to be to eliminate excess demand at the ceiling price?
a.
40 crowns
b.
10 crowns
c.
17 crowns
d.
20 crowns
e.
30 crowns
9. In a crowded city far away, the civic authorities decided that rents were too high. The long-run supply
function of two-room rental apartments was given by q = 14 + 3p and the long-run demand function
was given by q = 260 − 4p, where p is the rental rate in crowns per week. The authorities made it
illegal to rent an apartment for more than 30 crowns per week. To avoid a housing shortage, the
authorities agreed to pay landlords enough of a subsidy to make supply equal to demand. How much
would the weekly subsidy per apartment have to be to eliminate excess demand at the ceiling price?
a.
9 crowns
b.
24 crowns
c.
12 crowns
d.
6 crowns
e.
18 crowns
10. In a crowded city far away, the civic authorities decided that rents were too high. The long-run supply
function of two-room rental apartments was given by q = 20 + 5p and the long-run demand function
was given by q = 271 − 2p, where p is the rental rate in crowns per week. The authorities made it
illegal to rent an apartment for more than 23 crowns per week. To avoid a housing shortage, the
authorities agreed to pay landlords enough of a subsidy to make supply equal to demand. How much
would the weekly subsidy per apartment have to be to eliminate excess demand at the ceiling price?
a.
9 crowns
b.
18 crowns
c.
36 crowns
d.
15 crowns
e.
27 crowns
11. Suppose that King Kanuta from Problem 11 demands that each of his subjects give him 2 coconuts for
every coconut that they consume. The king puts all of the coconuts that he collects in a large pile and
burns them. The supply of coconuts is given by S(ps) = 100ps, where ps is the price received by
suppliers. The demand for coconuts by the king’s subjects is given by D(pd) = 2,666.67 − 100pd, where
pd is the price paid by consumers. In equilibrium, the price received by suppliers will be
a.
$8.
b.
$12.
c.
$13.33.
d.
$40.
e.
None of the above.
12. Suppose that King Kanuta from Problem 11 demands that each of his subjects give him 4 coconuts for
every coconut that they consume. The king puts all of the coconuts that he collects in a large pile and
burns them. The supply of coconuts is given by S(ps) = 100ps, where ps is the price received by
suppliers. The demand for coconuts by the king’s subjects is given by D(pd) = 2,080 − 100pd, where pd
is the price paid by consumers. In equilibrium, the price received by suppliers will be
a.
$4.
b.
$10.40.
c.
$52.
d.
$6.
e.
None of the above.
13. Suppose that King Kanuta from Problem 11 demands that each of his subjects give him 1 coconuts for
every coconut that they consume. The king puts all of the coconuts that he collects in a large pile and
burns them. The supply of coconuts is given by S(ps) = 100ps, where ps is the price received by
suppliers. The demand for coconuts by the king’s subjects is given by D(pd) = 4,000 − 100pd, where pd
is the price paid by consumers. In equilibrium, the price received by suppliers will be
a.
$24.
b.
$20.
c.
$40.
d.
$16.
e.
None of the above.
14. Suppose that King Kanuta from Problem 11 demands that each of his subjects give him 4 coconuts for
every coconut that they consume. The king puts all of the coconuts that he collects in a large pile and
burns them. The supply of coconuts is given by S(ps) = 100ps, where ps is the price received by
suppliers. The demand for coconuts by the king’s subjects is given by D(pd) = 10,400 − 100pd, where
pd is the price paid by consumers. In equilibrium, the price received by suppliers will be
a.
$20.
b.
$52.
c.
$30.
d.
$260.
e.
None of the above.
15. Suppose that King Kanuta from Problem 11 demands that each of his subjects give him 3 coconuts for
every coconut that they consume. The king puts all of the coconuts that he collects in a large pile and
burns them. The supply of coconuts is given by S(ps) = 100ps, where ps is the price received by
suppliers. The demand for coconuts by the king’s subjects is given by D(pd) = 7,650 − 100pd, where pd
is the price paid by consumers. In equilibrium, the price received by suppliers will be
a.
$153.
b.
$18.
c.
$27.
d.
$38.25.
e.
None of the above.
16. In Problem 6, the demand function for Schrecklichs is 200 − 4PS − 2PL and the demand function for
LaMerdes is 200 − 3PL − PS, where PS and PL are respectively the price of Schrecklichs and LaMerdes.
If the world supply of Schrecklichs is 130 and the world supply of LaMerdes is 120, then the
equilibrium price of Schrecklichs is
a.
$5.
b.
$17.50.
c.
$30.
d.
$25.
e.
$10.
17. In Problem 6, the demand function for Schrecklichs is 200 − 4PS − 2PL and the demand function for
LaMerdes is 200 − 3PL − PS, where PS and PL are respectively the price of Schrecklichs and LaMerdes.
If the world supply of Schrecklichs is 140 and the world supply of LaMerdes is 180, then the
equilibrium price of Schrecklichs is
a.
$15.
b.
$14.
c.
$2.
d.
$16.
e.
$28.
18. In Problem 6, the demand function for Schrecklichs is 200 − 4PS − 2PL and the demand function for
LaMerdes is 200 − 3PL − PS, where PS and PL are respectively the price of Schrecklichs and LaMerdes.
If the world supply of Schrecklichs is 140 and the world supply of LaMerdes is 120, then the
equilibrium price of Schrecklichs is
a.
$2.
b.
$28.
c.
$26.
d.
$15.
e.
$4.
19. In Problem 6, the demand function for Schrecklichs is 200 − 4PS − 2PL and the demand function for
LaMerdes is 200 − 3PL − PS, where PS and PL are respectively the price of Schrecklichs and LaMerdes.
If the world supply of Schrecklichs is 150 and the world supply of LaMerdes is 150, then the
equilibrium price of Schrecklichs is
a.
$5.
b.
$20.
c.
$15.
d.
$12.50.
e.
$10.
20. In Problem 6, the demand function for Schrecklichs is 200 − 4PS − 2PL and the demand function for
LaMerdes is 200 − 3PL − PS, where PS and PL are respectively the price of Schrecklichs and LaMerdes.
If the world supply of Schrecklichs is 110 and the world supply of LaMerdes is 110, then the
equilibrium price of Schrecklichs is
a.
$27.
b.
$22.50.
c.
$9.
d.
$36.
e.
$18.