Author Question: Refer to Table 3-6. The table contains information about the sorghum market. Use the table to answer ... (Read 245 times)

segrsyd · **on:** Jun 29, 2018

Refer to Table 3-6. The table contains information about the sorghum market. Use the table to answer the following questions.

a. What are the equilibrium price and quantity of sorghum?
b. Suppose the prevailing price is 6 per bushel. Is there a shortage or a surplus in the market?
c. What is the quantity of the shortage or surplus?
d. How many bushels will be sold if the market price is 6 per bushel?
e. If the market price is 6 per bushel, what must happen to restore equilibrium in the market?
f. At what price will suppliers be able to sell 36,000 bushels of sorghum?
g. Suppose the market price is 14 per bushel. Is there a shortage or a surplus in the market?
h. What is the quantity of the shortage or surplus?
i. How many bushels will be sold if the market price is 14 per bushel?
j. If the market price is 14 per bushel, what must happen to restore equilibrium in the market?

Question 2

For a person to have a comparative advantage in producing a product, he must be able to produce that product at a higher opportunity cost than his competitors.

Indicate whether the statement is true or false

cici · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

a. Equilibrium price = 10; Equilibrium quantity = 20,000 bushels.
b. There is a shortage.
c. Shortage = 30,000 - 8,000 = 22,000 bushels.
d. Quantity sold = 8,000 bushels.
e. Price must rise.
f. At 4 per bushel.
g. There is a surplus.
h. Surplus = 36,000 - 12,000 = 24,000 bushels.
i. Quantity sold = 12,000 bushels.
j. Price must fall.

Answer to Question 2

FALSE