Question 1. 1. An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery. The first development concerned side effects from the surgery, including blurred vision. The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges. In the market for laser eye surgeries, these two developments (Points : 1) decreased demand and decreased supply, resulting in a decrease in the equilibrium quantity and an increase in the equilibrium price of laser eye surgeries. decreased demand and increased supply resulting in an increase in both the equilibrium quantity and the equilibrium price of laser eye surgeries. Decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries. decreased demand and increased supply, resulting in a decrease in both the equilibrium price and the equilibrium quantity of laser eye surgeries.
Question 2. 2.
Refer to Table 3-1. The table above shows the demand schedules for loose-leaf tee of two individuals (Sunil and Mia) and the rest of the market. If the price of loose-tea raises from $3 to $4 the market quantity demanded would (Points : 1) Decrease by 32 pounds. increase by 64 pounds. increase by 32 pounds. decrease by 64 pounds.
Question 3. 3. If the quantity demanded for a product exceeds the quantity supplied the market price will rise until (Points : 1) the quantity demanded equals the quantity supplied. The product will then no longer be scarce. quantity demanded equals quantity supplied. The equilibrium price will then be greater than the market price. only wealthy consumers will be able to afford the product. Quantity demanded equals quantity supplied. The market price will then equal