Suppose the government sets a Price Ceiling at $5. If the market equilibrium price is $3, the Price Ceiling will be: Select one: a. binding. b. effective. c. illegal. d. non-binding.
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- Does a price ceiling attempt to make a price higher or lower?Consider a market that is initially in equilibrium and the equilibrium price and quantity are P and Q respectively. Then, the government decides to impose a price ceiling at a price of Pc that is less than P. Which of the following statements is correct? 1. After the price ceiling is imposed, the quantity demanded is less than the quantity supplied on the market. 2. After the price ceiling is imposed, the quantity actually sold in the market is lower than it was before the price ceiling was imposed. 3. Producer surplus in the market increased after the price ceiling was imposed. 4. Since Pc is less than P, the price ceiling is effective and therefore, there is no deadweight loss in the market.If the government were to set a price floor for fresh jumbo shrimps above the market equilibrium, then we would expect, relative to the market outcome, a. fresh jumbo shrimp supply decreases b. a surplus for fresh jumbo shrimps c. a shortage of fresh jumbo shrimps d. nothing change because the price floor is not binding
- Examine the imposition of a price floor on the market. What happens to the following? • Price paid by the buyer• Quantity demanded• Quantity supplied• quantity of the good sold• Consumer surplus• Producer surplus• Total surplus b) Examine the imposition of a price ceiling on the market. What happens to the following? • Price paid by the buyer• Quantity demanded• Quantity supplied• Quantity of the good sold• Consumer surplus• Producer surplus• Total surplus c) Discuss two unintended effects of a price ceilingSuppose that the government has been supporting the price of corn. Its free market price is $2.50 per bushel, but the government has been setting a support price of $3.50 per bushel. Which of the following are ways that the government might try to reduce the size of the corn surplus? (Select one or more answers from the choices shown.) a. Decrease the support price. b. Institute an acreage allotment program. c. Decrease demand by taxing purchases of corn. d. Raise the support price.Let’s say that Marianne is a politician who promises cheaper gasoline for everyone in the country if she is elected. Once she is elected, she makes gas cheaper by imposing a price ceiling that is one full dollar less than the market’s equilibrium price. Would she expect to be reelected in the long run?
- Which policy increases the consumption of a good? a price floor/a price ceiling / a subsidy/ a taxSome consumers lobby the government to convince law makers to impose price ceilings, what are the expected results of price ceiling (choose ALL applies) - Producer Surplus increases - Consumer Surplus increases - Consumers buy at prices lower than producer costs of production. - Consumer earn more income. - Total Surplus increasesLet’s say that Marianne is a politician who promises cheaper gasoline for everyone in the country if she is elected. Once she is elected, she makes gas cheaper by imposing a price ceiling that is one full dollar less than the market’s equilibrium price. What would be the reaction of the sellers of gasoline and of the public to Marianne’s price ceiling law?
- Hello, please help me with the following questions What is the amount of shortage or surplus in the corn market as result of the price floor? If the government agrees to purchase any surplus output at $12, how much will it cost the government? If the government buys all of the farmers' output at the floor price, how many bushels of corn will it have to purchase and how much will it cost the government?When the government imposes a binding price floor,it causesa. the supply curve to shift to the left.b. the demand curve to shift to the right.c. a shortage of the good to develop.d. a surplus of the good to developA government decides to set a price ceiling on bread so that bread is affordable to the poor. The conditions of demand and supply are given in the table below. What is the equilibrium price before the price ceiling? What will the excess supply or the shortage be if the price ceiling is set at $2.40? Price Qd Qs $1.60 9,000 5,000 $2.00 8,500 5,500 $2.40 8,000 6,400 $2.80 7,500 7,500 $3.20 7,000 9,000 $3.60 6,500 11,000 $4.00 6,000 15,000 A. $2.80; 1,600 shortage B. $2.80; 1,600 excess supply C. $2.40; 1,600 shortage
