Question 23Katherine is the president of the United States. In an attempt to make gasoline prices cheaper, shehas imposed a binding price ceiling on gas. What would she expect her critics to say?O The binding price ceiling will cause firms to produce only gasoline of the highest quality.O The binding price ceiling will encourage oil companies to deplete the resource too quickly.The binding price ceiling will cause firms to minimize their spending on the research and development ofalternatives to gasoline.O The binding price ceiling will increase the likelihood that customers obtain needed gasoline on the blackmarket.The binding price ceiling will discourage individuals from using their personal automobiles to commute towork or school.

According to the given question Option(D) is correct the binding price ceiling will increase the…

Answered: Question 23 Katherine is the president…

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 7PA

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Similar questions

What is consumer surplus? How is it illustrated on a demand and supply diagram?
Table 4.6 shows the amount of savings and barrowing in a market for loans lo purchase homes, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market? How can you tell? Now, imagine that because of a shift in the perceptions of foreign investors, the supply curve shifts so that there will be 10 million less supplied at every interest rate. Calculate the new equilibrium interest rate and quantity, and explain why the direction of the interest tale shift makes intuitive sense.
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.
Explain why the following statement is false: In the goods market, no buyer would be willing to pay more than me equilibrium price.
What is the relationship between quantity Demanded and quantity supplied at equilibrium? What is the relationship when there is a shortage? What is the relationship when them is a surplus?
Table 3.8 shows information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands. What is the quantity demanded and the quantity supplied at a price of 210? At what price is the quantity supplied equal to 48,000? Graph the demand and supply curve for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from line table? What HIE die equilibrium price and equilibrium quantity? If the price was 120, what would the quantities demanded and supplied he? Would a shortage or surplus exist? If so, how large would the shortage or surplus he?
In the financial market, what causes a movement along the supply curve? What causes a shift in the supply curve?
Why would a free market mar operate at a quantity greater than the equilibrium quantity? Hint: What would be required for at transaction to occur at that quantity?
In the financial market, what causes a movement along the demand curve? What causes a shift in the demand curve?
A tariff is a tax on imported goods. Suppose the U.S. government cuts the tariff on imported flat screen televisions. Using the four-step analysis, how do you think the tariff reduction will affect the equilibrium price and quantity of flat screen TVS?
Imagine that to preserve the traditional way of life in small fishing villages, at government decides to impose a price floor that will guarantee all fishermen a certain price for their catch. Using the demand and supply framework, predict the effects on the price, quantity demanded, and quantity supplied. With the enactment of this price floor for fish, what are some of the likely unintended consequences in file market? Suggest some policies other than the price floor to make it possible for small fishing villages to continue.
When analyzing a market, how do economists deal with the problem that many factors that affect the market are changing at the same time?

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