ch16
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____
1.
The inverse demand function for grapefruit is defined by the equation
p
= 282 – 9
q
, where q is the number of
units sold. The inverse supply function is defined by
p
= 7 + 2
q
. A tax of $22 is imposed on suppliers for each
unit of grapefruit that they sell. When the tax is imposed, the quantity of grapefruit sold falls to
a.
25.
b.
14.
c.
21.
d.
23.
e.
24.
____
2.
In a crowded city far away, the civic authorities decided that rents were too high. The longrun supply func
tion of tworoom rental apartments was given by
q
= 17 + 4
p
and the longrun demand function was given by
q
= 304 – 5
p
, where
p
is the rental rate in crowns per week. The authorities made it illegal to rent an apart
ment for more than 27 crowns per week. To avoid a housing shortage, the authorities agreed to pay landlords
enough of a subsidy to make supply equal to demand. How much would the weekly subsidy per apartment
have to be to eliminate excess demand at the ceiling price?
____
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 Spring '08
 TOOSSI
 Supply And Demand, demand function

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