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Although it is an imperfect model for describing a complex m

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Although it is an imperfect model for describing a complex m [#permalink] New post 14 Apr 2019, 10:44
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Although it is an imperfect model for describing a complex market, the theory of supply and demand is a reasonably accurate method of explaining, describing, and predicting how the quantity and price of goods fluctuate within a market. Economists define supply as the amount of a particular good that producers are willing to sell at a certain price. For example, a manufacturer might be willing to sell 7,000 sprockets if each one sells for $ 0.45 but would be willing to sell substantially more sprockets, perhaps 12,000, for a higher price of $ 0.82. Conversely, demand represents the quantity of a given item that consumers will purchase at a set price; in the most efficient market, all buyers pay the lowest price available, and all sellers charge the highest price they are able. The intersection of these occurrences is graphically represented in supply and demand curves that show the prices at which a product becomes too expensive or too readily available.
Which one of the following best expresses the main idea of the passage?

1) explaining why buyers in a given market tend to seek the lowest price on available goods
2) offering a dissenting perspective on an obsolete economic model
3) persuading readers that the model of supply and demand is the best method for understanding market forces
4) providing an explanation of the two primary elements of an economic model and how they intersect
5) analyzing the fluctuation of supply and demand within a market

[Reveal] Spoiler: OA
D


Consider each of the choices separately and select all that apply.

If the producer of sprockets nearly doubles its prices as described in the passage, it follows that

1) buyers in the market will be likely to purchase more of the sprockets being sold.
2) the price of sprockets will continue to increase.
3) buyers in the market will be likely to purchase fewer of the sprockets being sold.

[Reveal] Spoiler: OA
C


Select the sentence in the passage that illustrates an abstract concept presented by the author.

[Reveal] Spoiler: OA
For example, a manufacturer might be willing to sell 7,000 sprockets if each one sells for $ 0.45 but would be willing to sell substantially more sprockets, perhaps 12,000, for a higher price of $ 0.82.


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Although it is an imperfect model for describing a complex m

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