Suppose the equilibrium price of milk is $3 per gallon but the federal government sets the market price at $2per gallon. The result will be:excess supplyexcess demandsurplusshorting the marketQUESTION 29Suppose your utility function for food and clothing is (F,C)= 2F+4C. If you reduce your food consumption by 2units, how much do you have to increase your clothing consumption in order to maintain the same utility level?1 unit002 units4 units8 unitsQUESTION 30The aggregate demand for good X is Q = 20 - P, and the market price is P = $8. What is consumer surplus at thisprice?$72$96$144$168

“Since you have posted multiple questions, we will provide the solution only to the first question…

Suppose the equilibrium price of milk is $3 per gallon but the federal government sets the market price at $2 per gallon. The result will be: excess supply excess demand surplus shorting the market 0000

Suppose the equilibrium price of milk is $3 per gallon but the federal government sets the market price at $2 per gallon. The result will be: excess supply excess demand surplus shorting the market 0000

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Concept explainers

Equilibrium Price and Quantity

Equilibrium refers to a state of balance that comes about because there is equality in all forces.

Question

Suppose the equilibrium price of milk is $3 per gallon but the federal government sets the market price at $2
per gallon. The result will be:
excess supply
excess demand
surplus
shorting the market
QUESTION 29
Suppose your utility function for food and clothing is (F,C)= 2F+4C. If you reduce your food consumption by 2
units, how much do you have to increase your clothing consumption in order to maintain the same utility level?
1 unit
00
2 units
4 units
8 units
QUESTION 30
The aggregate demand for good X is Q = 20 - P, and the market price is P = $8. What is consumer surplus at this
price?
$72
$96
$144
$168

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