An effective price floor causes the quantity exchanged to _______ and the price of the product to ______ compared to the market equilibrium. Question 4Answer a. decrease, decrease b. increase, increase c. increase, decrease d. decrease, increase
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- What is a the typical result of a price floor? Question 29 options: a) quantity supplied equals quantity demanded. b) Customers unable to obtain the product c) excess demand. d) excess supply.D. Instead of a ceiling, suppose the government places a price floor of $18. Explain the effect of the price floor.E. Highlight the difference between a change in demand and a change in quantity demanded.F. Identify ONE (1) factor that could lead to a rightward shift in the supply curve.A market is described by the following supply and demand curves: QS=2P andQD =300-2Pa. Solve for the equilibrium price(in $) and quantity.b. Two policies have been suggested to the government i) a price floor of $90 or anii)price ceiling of $90. Which policy government can take and why?c. For the adopted policy in b) what will be the price, quantity demand, quantitysupply, shortage, and surplus?
- policies are is aimed at reducing violent crimes in Country A by reducing the use of guns. Demonstrate diagrammatically and explain the effectof each of these proposed policies in a demand and supply diagram of the gun market A tax on gun ammunitionConsider an economy where many farmers plant and sell sugar cane for a living. (a) Discuss the welfare effects when the government implements a price floor in the sugar cane market to help the sugar cane farmers. Support your answers with a suitable sugar cane market diagram. Are the sugar cane farmers better off with this policy? Explain. (b) How would your answer be different if the government commits to buy up all the sugar cane at the floor price from the farmers and sell to the consumers at a lower price to clear the stock? Discuss and support your answers with a suitable sugar cane market diagram.Identify the most accurate statement. A price floor will have live largest effect if it is set: substantially above the equilibrium price slightly above the equilibrium price slightly below the equilibrium price substantially below the equilibrium price
- Assume that the government sets a binding price ceiling on the interest rate that banks charge on loans.Explain carefully the impact of this policy on the financial markets. Assume that the government sets a price floor in the market for wheat and the price floor is set below themarket equilibrium of wheat. Discuss carefully the effectiveness of this policy on the market4. The rent control agency of Rochester has found that aggregate demand is P = 500 – 5QD. Quantity, QD, is measured in thousands of apartments. Price, P, equals the monthly rental rate in dollars. The city’s board of realtors acknowledges that this is a good demand estimate and has shown that supply can be expressed as P = 5QS. a. If the agency and the board are right about demand and supply, respectively, what is the free-market price? How many apartments are rented? B. If we assume an average of 3 persons per apartment, what is the expected change in city population if the agency sets a maximum average monthly rent of $100 and all those who cannot find an apartment leave the city?When the market price is lower than the equilibrium price, the result is excess ____.When the market price is higher than the equilibrium price, the result is excess _____. Question 1Answer a. Supply; demand b. Demand; demand c. Demand; supply d. Supply; supply
- Which of the following statements are false? A. The absolute price of a hood is the dollar or money price of the good. B. Firms may not adjust their prices immediately because they may be unable to figure out whether a decline in demand is temporary or permanent. C. Some prices in an economy, adjust faster than other prices. D. Aggregate demand curves slope downward.given Market demand is P(Q)= 5.2-0.1Q, market supply P(Q)= 2+ 0.1Q, price floor of 4.40. What is the government expenditure?An effective price ceiling causes the quantity exchanged to _______ and the price of the product to ______ compared to the market equilibrium. Question 2Answer a. decrease, decrease b. increase, decrease c. increase, increase d. decrease, increase
