Consider schedule #1 in the aggregate demand and aggregate supply table given below.The equilibrium output and price level for the economy described on this schedule are:
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Table 10.1
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$#2#3$7.0110$5.0$6.0$4.06.51205.56.54.56.01306.07.05.05.51406.57.55.55.01507.08.06.0\begin{array} { c c c c c } \begin{array} { c } \text { Quantity of } \\\text { Aggregate Output } \\\text { Demanded }\end{array} & \begin{array} { c } \text { Price } \\\text { Level }\end{array} &\#1& \begin{array} { c } \text { Quantity of } \\\text { Aggregate Output Supplied } \\\# 2\end{array} & \# 3 \\\hline \$ 7.0 & 110 & \$ 5.0 & \$ 6.0 & \$ 4.0 \\6.5 & 120 & 5.5 & 6.5 & 4.5 \\6.0 & 130 & 6.0 & 7.0 & 5.0 \\5.5 & 140 & 6.5 & 7.5 & 5.5 \\5.0 & 150 & 7.0 & 8.0 & 6.0\end{array}$
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A) $7.0 and 110,respectively.
B) $6.5 and 120,respectively.
C) $6.0 and 130,respectively.
D) $5.5 and 140,respectively.
E) $5.0 and 150,respectively.

Question

Consider schedule #1 in the aggregate demand and aggregate supply table given below.The equilibrium output and price level for the economy described on this schedule are:
?
Table 10.1
?
?

#2#3$7.0110$5.0$6.0$4.06.51205.56.54.56.01306.07.05.05.51406.57.55.55.01507.08.06.0\begin{array} { c c c c c } \begin{array} { c } \text { Quantity of } \\\text { Aggregate Output } \\\text { Demanded }\end{array} & \begin{array} { c } \text { Price } \\\text { Level }\end{array} &\#1& \begin{array} { c } \text { Quantity of } \\\text { Aggregate Output Supplied } \\\# 2\end{array} & \# 3 \\\hline \$ 7.0 & 110 & \$ 5.0 & \$ 6.0 & \$ 4.0 \\6.5 & 120 & 5.5 & 6.5 & 4.5 \\6.0 & 130 & 6.0 & 7.0 & 5.0 \\5.5 & 140 & 6.5 & 7.5 & 5.5 \\5.0 & 150 & 7.0 & 8.0 & 6.0\end{array}

?

A) $7.0 and 110,respectively.
B) $6.5 and 120,respectively.
C) $6.0 and 130,respectively.
D) $5.5 and 140,respectively.
E) $5.0 and 150,respectively.

wanyonyi edwine · Accepted Answer

Final Answer : C, Explanation :  The equilibrium output and price level are found where the quantity of aggregate output demanded equals the quantity of aggregate output supplied. In schedule #1, this occurs at a price level of 130 with an aggregate output of $6.0.

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