Question

If people expect the price of packaged banana to drop next week, banana demand will:
A) increase now. B) stay the same now and decrease next week. C) decrease now. D) stay the same now and increase next week.

9) Suppose that a market is initially in equilibrium. Then the government imposes a price floor above the equilibrium price. Which of the following would occur in the absence of a black market?

A) the quantity supplied would decrease B) the market would remain in equilibrium C) the quantity demanded would increase D) the quantity sold would drop

Answer 1

If people expect the price of packaged banana to drop next week, banana demand will:
C) decrease now
Ans. people will delay their consumption of bananas for the next week. Hence, demand will drop this week.

Suppose that a market is initially in equilibrium. Then the government imposes a price floor above the equilibrium price. Which of the following would occur in the absence of a black market?
D) the quantity sold would drop
The quantity suppplied would increase but the quantity demanded would decrease at this higher price. Hence, quantity sold would drop and there would be surplus in the market.