Answered: . Explain why economists usually oppose…

Business

Economics

. Explain why economists usually oppose price control

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 4QR

See similar textbooks

Related questions

Q: Why do government leaders impose price controls? O a) They are trying to ensure that a social goal…

A: Price control means the setting of minimum and maximum price of a product by government. Price…

Q: In the graph, if the government sets a price floor of 90 75 50 25 10 D 200 500 800 O shortage of 600…

A: Price floor refers to the legal minimum price that can be charged for a good.

Q: Quantity Demanded Quantity Supplied in Million Price in $ in Million 16 120 20 100 18 18 80 20 16 60…

A: The surplus is caused by the firms when the government intervenes and sets the price level as per…

Q: Given the figure below and and information on recycling markets. D shows the market demand for…

A: The recycling ratio is the ratio of the total number of cans that are produced from recycled cans to…

Q: Let’s say that Marianne is a politician who promises cheaper gasoline for everyone in the country if…

A: From the aforementioned question, it can be stated that Marianne is one of the politicians who are…

Q: 1) Why do some price controls help create black markets? 2) What is a black market you have…

A: A ‘black market’ could be a sector of the economy where transactions occur without the knowledge of…

Q: 1. On the graph below, show a price ceilling at $3. a. Illustrate and identify the resulting XS…

A: "As per the guidelines answer is given to the first question" 1) "Price ceiling is a limit on price…

Q: If the government enacts a price ceiling of $60 për morith, Connect i What will be the price? 11.…

A: equilibrium is achieved where Qs=Qd thus Q* = 100 million units, P* =$45

Q: gas (9), upply 4Pg 2.4000000000000004P. ; where Pg and P, are the prices of natural gas and oil,…

Q: Suppose that the government imposes a tax on eigarettes Use the diagram below to answer the…

A: The diagram in the question above shows that the demand curve (D) without the tax and supply curve…

Q: During our discussion of price controls, we covered a concept called “concentrated benefits,…

A: In a free market, price and quantity of a commodity has been set by the market forces of demand and…

Q: Why do shortages develop under a binding price ceiling? O a) A ceiling makes the price so low that…

A: Price ceiling refers to the maximum legal price that can be charged for a good.

Q: Consider the market for ice cream cones. Suppose that supply in this market is given by PS = Q$ and…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: #3. Suppose that the government was taxing consumers of widgets by $3 per unit. Now it repeals the…

A: The tax effect on the market does not change depending on whom the tax is levied.

Q: 2) From the graph above on the welfare impact of subsidies, indicate which area represents the total…

A: A subsidy is a government payment made directly or indirectly to individuals or businesses, usually…

Q: P^S= 2Q^S P^D=18-Q^D Suppose that the government imposes a price control at a price of $16.00.…

A: Demand: - Demand is the relationship between the quantity demanded and the price of a good. There is…

Q: We've seen how many economists vehemently oppose price controls, saying that they'll create either…

A: Price controls are laws imposed by the government to limit pricing. There are two types of price…

Q: Are modern price controls such as ceiling and floors, similar? Why or why not?

A: Price ceiling is below equilibrium price level.

Q: f. Compute the change in total surplus. If you were an economic advisor to the Mayor whose goal is…

A: In order to answer parts f through h we need results from part c,d and e. In part c , we see that…

Q: Explain why economist usually oppose controls on prices.

A: The price ceiling sets the highest price of the service while the price floor puts the lowest price…

Q: Lovers of classical music persuade Congress to imposea price ceiling of $40 per concert t1cke1. As a…

A: A price ceiling is the most a producer can charge for their product or service. This is frequently…

Q: 4) Based on the graph Welfare Impact of Price Controls, indicate which area measures the welfare…

A: option C, ACE is correct

Q: The diagram to the right shows a market in which a price floor has been imposed Identify the…

A: Inefficient allocation of resource generates the dead-weight loss because it deviates the economy…

Q: 2. What happens to the amount of deadweight loss as a tax increases? Explain and use supply/demand…

A: Hey, Thank you for the question. According to our policy we can only answer 1 question per session.…

Q: IS no government intervention in this market, what is the equilibrium price and quantity? me…

A: The equilibrium price and quantity in the market of a good gets decided at a point where demand for…

Q: Suppose that the government establishes a price ceiling of $3.70 for wheat a. What might prompt the…

Q: Explain the effects of the price ceiling in economics give only two points?

A: In a market, price ceiling is one of the government price control policies to influence the market…

Q: Consumer and Producer's Surplus Given a verbal demand and/or a supply function, be able to find the…

A: Hey, Thank you for the question. According to our policy we can only answer 3 subparts per question.…

Q: Let’s say that Marianne is a politician who promises cheaper gasoline for everyone in the country if…

A: From the aforementioned question, it can be stated that Marianne is one of the politicians who are…

Q: cream is given by QS = 4P - 10. Use negative signs where appropriate. Round to the st one-hundredth…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first three subparts for you.…

Q: What are the different price controls that governments use to influence the market. Using…

A: Price controls are government-mandated minimum or maximum rates for particular products, usually…

Q: Consider the market for ice cream cones. Suppose that supply in this market is given by PS =QS and…

A: "Since you have posted a question with multiple sub parts .We will solve first three subpart for…

Q: Let the following be the supply and demand for coconuts. P 2 3 4…

A: As per the given information, demand = supply for price $5. At this price, the QD = QS = 400.Now as…

Q: %#3. Suppose that the government was taxing consumers of widgets by $3 per unit. Now it repeals the…

A: A tax lived on producer or consumer does not change the effect on price and quantity after the tax…

Q: If a government imposed a minimum price at point A; discuss the type of price control this would be…

A: The type of price control used here is Price floor. It the minimum possible price set by the…

Q: 15. What does a binding price ceiling cause? a. excess supply b. a shortage c. a…

A: In a market, binding price ceiling refers to the maximum market price set by the government, which…

Q: GRAPH ANALYSIS Referring to the graph below, explain how: (a) An excess of supply might be created…

A: The curve that depicts different quantities being demanded by individuals at various levels of price…

Q: Now go back to original demand and supply. Suppose a price ceiling P=$70 is imposed. Wh Producer…

A: Producer surplus refers to the area below the price and above the supply curve. Deadweight loss…

Q: The graph attached shows the demand and supply in a market. (a) The equilibrium quantity is…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: The graph below depicts the market for rice in the country of Shiva. 10 Tools D2 (8.5, 6) 2 4 6 10…

A: Equilibrium is achieved at the output level where quantity demanded by consumer equals quantity…

Q: onsider the market for ice cream cones. Suppose that supply in this market is given by ?? =?? and…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Suppose the California legislature passed a sweeping law to lower the number of regulations for…

A: In this case sweeping law will empowers California government to make necessary law and give proper…

Q: What generally happens when the government sets a price ceiling?

A: Price floor: - Price floor is a government policy of setting the minimum price for any good or…

Q: ) Define price ceiling and price floor and give an example of each. Which leads to a shortage? Which…

A: Hi! Thank you for the question As per the honor code, We’ll answer the first question since the…

Q: Suppose that the demand curve for wheat is Q-140-200 and the supply curve i Q³=20p. The government…

A: A deadweight loss is a cost to society created by market inefficiency, which occurs when supply and…

Q: Price in $ Quantity Demanded Quantity Supplied in Million in Million 120 16 20 100 18 18 80 20 22 16…

A: We are going to discuss the Binding and Non-Binding Price ceiling to answer this question.

Q: a) Discuss advantages and disadvantages when government imposes price ceiling.

A: NOTE: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: 3. The figure to the right illustrates the market for apples in which the government has imposed a…

A: A price floor is a government- or group-imposed price control or limit on how low a price can be…

Q: Use the data from the chart above. If you are a seller in this business, what would happen to market…

A: Price ceiling is a price control method in which the government sets the maximum limit on prices…

Q: Seeing the huge demand for pens, the government decides to impose price controls on masks. Consider…

A: Hello, thank you for the question. Since there are multiple subpart questions posted here, only the…

Concept explainers

Price Ceilings and Price Floors

Price Ceilings and Price Floors strategy is used by the Government to control the prices of certain goods and services in the market. This method helps the Government to protect the interests of both buyers and suppliers in difficult economic times.

Question

. Explain why economists usually oppose price control

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Does a price ceiling increase the decrease the number of transactions in a market? Why? What about a price floor?
During a discussion several year; ago on building a pipeline to Alaska to carry natural gas, the U.S. Senate passed a bill stipulating mat there should be a guaranteed minimum price for the natural gas that would flow through line pipeline. The thinking behind the bill was that if private firms had a guaranteed price for their natural gas, they would be more willing to drill for gas and to pay to build the pipeline. Using the demand and supply framework, predict the effects of this price floor on fine price, quantity demanded, and quantity supplied. With the enactment of this price floor for natural gas, what are some of the likely unintended consequences in line market? Suggest some policies other than the price floor that he government can pursue if it wishes to encourage drilling for natural gas and fur a new pipeline in Alaska.
If a price floor benefits producers, why does a price floor reduce social surplus?
We've seen how many economists vehemently oppose price controls, saying that they'll create either shortages (price ceilings) or gluts (price floors). How do studies of minimum wage (a price floor) challenge this orthodoxy?
The table below illustrates the market's demand and supply for cheddar cheese. a. Find the equilibrium price and quantity. b. If the government wished to make cheddar cheese more affordable, which would be a more appropriate policy choice: a price ceiling or a price floor? Explain your answer. c. If a price ceiling was set at $3.20, what would the quantities demanded and supplied be? Would a shortage or surplus exist? If so, how large would the shortage or surplus be? d. If the price ceiling were raised to $3.80, would a shortage or surplus exist? If so, how large would the shortage or surplus be? (Be careful with this one. Remember that this is a price ceiling intended to make cheese affordable.) e. The price of milk, a key input for cheese production, rises, so that the supply decreases by 80 pounds at every price. Find the new equilibrium price and quantity. (Hint: the demand schedule will remain same, but the supply schedule will be different.) f. A new study…