Question

Principles of Macroeconomics

Please double check my answers

1.) The table below describes the market for fast food employees. What is the equilibrium quantity of fast food employees?

Hourly Wage	Quantity demanded per day (in thousands)	Quantity supplied per day (in thousands)
$6.50	150	10
$7.00	125	25
$7.50	100	50
$8.00	75	75
$8.50	50	100

I answered 100 thousand employees

2.) When consumers are ____________ in the future of the market, they demand __________ financial capital.

uncertain, more

certain, more (I answered)

certain, less

None of the above.

3.) If a maximum interest rate for credit cards is set above the equilibrium interest rate, ________________.

interest rates will increase

interest rates will decrease ( I answered)

there will be a surplus of credit cards

no change will occur

Answer 1

(1) Correct answer = 75 thousand

In equilibrium, quantity demanded equals quantity supplied, which holds true when quantity is 75 thousand with wage of $8.

(2) "Certain, more" is correct.

When consumers are certain about future market, consumer confidence increases, increasing consumption demand. So the portion of consumption funded by borrowing also increases, increasing the demand for financial capital.

(3) Correct answer = No change will occur.

In any market, if maximum price is set higher than equilibrium price, this does not affect the equilibrium price or equilibrium quantity.