1. For substitutes in consumption: an increase in the price of one will increase

Question

1. For substitutes in consumption: an increase in the price of one will increase the quantity supplied of the other an increase in the price of one will decrease the demand for the other an increase in the price of one will increase the demand for the other both A and B d. 2. A price ceiling will result in: shortage market-clearing quantity surplus equilibrium a. b. 3. The market-clearing quantity is determined by finding: MPP crosses zero wealth transfer shutdown a. b. -equilibrium 4. An increase in price of fertilizer which is an input to corn production causes the following: a change in demand for corn leading to a change in quantity supplied of corn b. a change in quantity supplied of corn leading to a change in quantity demanded of corn -a change in quantity supplied of corn leading to a change in demand for corn d. a change in supply of corn leading to a change in quantity demanded of corn C. 5. A shortage happens when: a.---quantity supplied is greater than quantity demanded b. quantity supplied is equal to quantity demanded quantity supplied is less than quantity demanded d. none of the above are true

Explanation / Answer

1. For substitutes in consumption
c. an increase in the price of one will increase the demand for the other

Explanation:- where there are substitutes in the market there options are available therefore, when the price of one product increases then the demand for that decreases thus increasing the demand for its substitute.

2. A price ceiling will result in :
a. shortage

Explanation.... price ceiling is set by the authorities where the price of a product can be fixed. it is always below the equilibrium, therefore shortage is created.

3. The market clearing quanity is determined by finding
d. equilibrium

Explanation...the price of good or services at which the demand is equal to supply is the market clearing price which is also called as equilibrium. therefore it is determined by finding equilibrium

4. An increase in price of fertilizer which is an input to corn production causes the following.
a. a change in demand for corn leading to a change in quantity supplied of corn.

Explanation....fertiliser is a major component in the production of corn, if the price of fertilisers increases, that increases the price of corn too and therefore when the price of corn increases its demand decreases.

5. A shortage happens when :
c. quantity supplied is less than quantity demanded

Explanation....when the supply is less in the market than the demand, the supply will not meet the demand thus there will be shortage.

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