QUESTION 2A binding price ceiling will have the following consequences:a. There will be upward pressure on prices until quantity demanded equals quantity suppliedb. The quantity demanded will always be smaller than the quantity suppliedc. There will be downward pressure on prices until quantity demanded equals quantity supplied.d. There are no consequences to a binding price ceiling.e. The quantity demanded will always exceed the quantity supplied

The price ceiling is the government determined maximum price which the seller can charge from the…

Answered: QUESTION 2 A binding price ceiling will…

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter4: Demand, Supply, And Markets

Section: Chapter Questions

Problem 7.15P

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13. Government intervention in the form of a binding price floor or a binding price ceiling will: A.Ensure that special interest groups are satisfied B.Ensure market efficiency C.Result in either excess supply or excess demand D.Automatically stabilize the market to achieve equilibrium more quickly 14. The St. Louis Symphony Orchestra wants to make sure that its concerts are affordable for all residents of and visitors to the city and therefore prices all of its tickets at $50. However, outside of Powell Hall, people can sell the same tickets for $200 or more. The true cost to the concertgoer of a ticket to the symphony is at least: A.$200 B.$50 C.$250 D.$125 19. Which of these items is most likely to be a complement to coffee? A.Yogurt B.Coffee filters C.Tea D.Decaf coffee 22. Which factor would cause a supply curve to shift to the RIGHT? A.A decrease in the price of a good B.An increase in the price of a good C.A decrease in the cost of an input used to produce a good D.A decrease in…
Question 1: Suppose demand and supply are given by Qd = 60 - P and Qs = 1.0P - 20.a. What are the equilibrium quantity and price in this market?Equilibrium quantity: Equilibrium price: $ b. Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $52 is imposed in this market.Quantity demanded: Quantity supplied: Surplus: c. Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of $36 is imposed in the market. Also, determine the full economic price paid by consumers.Quantity demanded: Quantity supplied: Shortage: Full economic price: $ Question 2: Consider a market where supply and demand are given by QXS = -14 + PX and QXd = 82 - 2PX. Suppose the government imposes a price floor of $37, and agrees to purchase and discard any and all units consumers do not buy at the floor price of $37 per unit. Instructions: Enter your responses rounded to the nearest penny (two decimal…
2. What would be the impact in this market, of a price floor set at $13 3. What would be the impact in this market, of a price floor set at $16 6. What would be the impact in this market, of a price ceiling set at $10
Describe the impact of a price ceiling in the bread market in the following areas: 1. Quantity of loaves produced 2. Size of the loaves 3. Quality of bread 4. Opportunity cost incurred by consumers 5. 1 more effect
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
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
Question 2 - Price Floor The Agricultural Society persuades the government, in the interest of food security, to impose a price floor on local carrots in order to keep carrot farmers in the business. (a) Assess the welfare implications of this measure. (b) Assess the effectiveness of this measure in keeping farmers in carrot farming.
Question 16 Due to a price ceiling on gasoline, over 10,000 potential gasoline consumers cannot buy at the current price. Over time, the demand for gasoline adjusts as people start buying electric cars. What will happen to the shortage? a The shortage will be greater than 10,000. b The shortage will be less than 10,000. c The shortage will be equal to 10,000.
MR PD Smith has heard that the government has proposed the imposition of a maximum price or price ceiling in the market for his product. He does not understand the implications of this proposed price ceiling on equilibrium in the market and has asked you to provide some clarity. The manufacturer would like to know the following: Is there a better alternative to imposing a price ceiling?
1. The equilibrium price in the housing market is very high. What do you think will happen if the government imposes a very high price ceiling that is below but very close to the equilibrium price on the housing market, because a politician owns housing units in certain areas? a. How does that affect the poor and the market for housing? b. Can you identify any losses or gains? Explain
1. A binding price floor in a market is removed. Which of the following is likely to occur as a result? SELECT THE CORRECT ANSWER a. The market price will rise. b. The demand for the item will fall. c. The market price will fall. d. The supply of the item will rise. 2. In 2016, Amazon began charging a 5.75% sales tax on products it sells in the District of Columbia. Holding all else constant, the effect of this tax would be to _____ in the District of Columbia. Select the correct answer a. decrease Amazon sales b. decrease prices for local businesses c. decrease the number of consumers d. increase Amazon sales
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.

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