Market Exit

1) Sam pays $600 for 30 days of guitar classes. He attends an hour-long class every day. If, instead of attending class, he works at a part-time job, he would be paid $5 an hour. Or, he could work at a fast-food outlet and  earn $9 per hour. Once he has already paid a nonrefundable fee of $600 to enroll in the class, what is his opportunity cost of attending each hour of class?

Screenshot from 2018-10-09 16-44-14

2) Refer to the figure above. Assuming that the market consists of only these two consumers, what is the market demand for pens when the price is $4?
A) 15 units
B) 25 units
C) 40 units
D) 65 units
The following table shows the market demand schedules and supply schedule for notebooks. Assume Bob and Sue are the only buyers in the market.

Screenshot from 2018-10-09 16-44-55

3) Refer to the table above. What is the equilibrium price of notebooks?
A) $2
B) $4
C) $6
D) $7
4) Refer to the table above. What is the equilibrium quantity of notebooks?
A) 4 units
B) 10 units
C) 12 units
D) 20 units
5) Refer to the table above. What is the shortage in the market when the price of a notebook is $1?
A) 0 units
B) 10 units
C) 14 units
D) 16 units
6) Refer to the table above. What is the shortage in the market when the price of a notebook is $3?
A) 4 units
B) 10 units
C) 16 units
D) 20 units
7) Refer to the table above. Assume that the market for notebooks is in equilibrium. Which of the following is likely to happen if a few sellers of notebooks decide to exit the market, everything else remaining unchanged?
A) Both the equilibrium price and quantity of notebooks remain unchanged.
B) Both the equilibrium price and quantity of notebooks decrease.
C) The equilibrium price of notebooks increases, but the equilibrium quantity decreases.
D) The equilibrium price of notebooks decreases, but the equilibrium quantity increases.

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