When a quota system is imposed on used cars market (which means to buy a used ca

Question

When a quota system is imposed on used cars market (which means to buy a used car, you must obtain a Quota first), which of the following models of cars is most likely to disappear from the market? 2007 Honda Accord 2002 Honda Accord 1997 Honda Accord 1992 Honda Accord If the Super Bowl this year is hold in Oregon (instead of Arizona), the best seats in the stadium are most likely to be taken by Fans from Oregon Fans from Seattle Fans from Northeast (Boston in specific) Equal likely to be taken by fans from the three areas mentioned above You own a T-shirt with Messi's signature on it. You value the T-shirt $50. I am a big fan of Messi: I value the T-shirt $120. Which of following statement is INCORRFCT? A voluntary trade can take place between us The joint gain from the trade depends on the price The price will fall in ($50, $120] when the trade is voluntary The gain for either of us depends on the price Which of the following statements about supply curves is INCORRECT? A supply curve is upward sloping A supply curve denotes the maximum quantity being supplied at different price levels A supply curve denotes the maximum prices required to induce sellers to supply given Quantity levels The area below price and above the supply curve represents seller's rent The equation for an inverse supply curve p=3q+1, if the price is$7, what's the seller's rent? 6 8 4 10

Explanation / Answer

a) When the economy is implementing the Quota system of used cars , then they will follow the FIFO Basis for the removal of used cars , So the anser is 1992 Honda Accord (Option D)

b) The plcae of running the show will attract more Audience , So the best seats in the stadium are more likely to be taken by aregon (Option A).

c) The Cost and profit for an individual depends upon the price factors, and ones ability to pay.so the Answer is the gain for Either of them depends upon price.

d) Other factors remaining the same, Price and Supply are directly or Positively Related which means increase in price leads to Increase insupply and decraese in price leads to decrease in Supply.

Supply represents the Qunatity supplied at different price levels. So Supplycurve is upward sloping curve.

But the area above the price and below the supplycurve is known as Producer Surplus.

So the Incorrect statement is "Option D"

e) Given Price function = p= 3q+1

at price = 7 , then 7 = 3q+1 : 3q= 6 : q= 2

Producer surplus is = half of the base *height

Base represents = Qunatity = 3

Height represents price = 7

so producer surplus = 1/2 * & * 3 = 10 ( Rounded)

So option D is the right answer.

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