Question

In each of the following scenarios, the market is essentially in equilibrium.

a) The number of surface flaws in plastic panels.
b) Trying to determine its depth, a rock climber drops a pebble into a chasm and hears the pebble strike the ground 3.90 s later.
c) An investment firm offers its customers municipal bonds that mature after varying numbers of years.
d) A friend once remarked that longer movies were a better deal than shorter movies because the ticket price was the same in both cases.

Answer 1

The questions discussed revolve around market equilibrium and the effects of various scenarios on supply and demand. These include changes in price above equilibrium, the ceteris paribus assumption, and specific factors altering the paint and home loan markets.

Step-by-step explanation:

The questions provided are dealing with the concepts of market equilibrium, supply and demand, and factors that impact these in different scenarios. One question explores what happens to the quantity demanded and supplied when the price of gasoline is above the equilibrium price. A surplus is created when the price is higher than equilibrium because the quantity supplied exceeds the quantity demanded. The ceteris paribus assumption is used by economists to isolate the effect of one variable by holding others constant. It simplifies complex real-world interactions to understand the influence of individual factors on economic outcomes.

Changes that impact the market for paint demonstrate how supply and demand can be influenced by technological advances, longevity of the product, natural disasters, and production capacity. Each factor affects the supply or demand curve in a distinctive way. Similarly, for the market for home loans, variables such as the demographic make-up of the population, economic confidence, and repayment rates on loans can have significant effects on equilibrium price and quantity, which can be visualized using demand and supply diagrams.