There has been a great deal of movement of physicians across borders within the European Union, and this migration has raised concerns about patient safety and quality of care. Some member states havegoods and services and in sharp spikes in product prices. Governments may respond to public outcries against dramatically higher prices by imposing price ceilings to lower product prices or to keep them from rising too high. What effect would such a binding price ceiling have? Who would benefit from this policy, and who would be harmed?

There has been a great deal of movement of physicians across borders within the European Union, and this migration has raised concerns about patient safety and quality of care. Some member states havegoods and services and in sharp spikes in product prices. Governments may respond to public outcries against dramatically higher prices by imposing price ceilings to lower product prices or to keep them from rising too high. What effect would such a binding price ceiling have? Who would benefit from this policy, and who would be harmed?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter4: Labor And Financial Markets

Section: Chapter Questions

Problem 32P: Imagine that to preserve the traditional way of life in small fishing villages, at government...

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Suppose the supply and demand curves for a particular product are given by:QS = -20 + 2P QD =100 - 2Pwhere QS and QD are quantities in units and P is the price per unit. Suppose the government implements a price ceiling of $20/unit in this market. Is this price ceilingbinding on the market? What are the quantities demanded and supplied at the price ceiling? Howmany units are exchanged at this price? Given the effects of the policy, is there a potential forillegal trade? Briefly explain your answers where necessary.
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. What would be the reaction of the sellers of gasoline and of the public to Marianne’s price ceiling law?
Given the following table, plot the demand and supply curves for cheese. Price Quantity Demanded Quantity Supplied $7 5 15 5 10 10 3 15 5 Would $3 be considered an effective (i.e., binding) price ceiling? With an effective price ceiling, what will happen to the market for cheese? Be specific. If the price ceiling was removed from the model, what will happen to price, quantity demanded, and quantity supplied? Be specific. What effect would a $7 price ceiling have on this market? What price and quantity will show up in the market?
What is the effect of the price gouging law (effectively a price control) on prices in the market for ice in Raleigh after the storm? Illustrate with the use of an appropriate figure, particularly in comparison to what price and quantity traded would be in a competitive market without such laws. Requirements: Able to precisely identify the economic concept for explaining price gouging laws, with the appropriate use of a figure and description of outcomes relative to the competitive benchmark.
Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P, QS = 2P. a) Find the current equilibrium price and quantity. b) What is the total producer surplus if the market is in equilibrium? The government is considering a minimum price policy to increase producer surplus. c) Explain by means of graphs how the introduction of a price floor can increase producer surplus. d) Find the (optimal) price floor that maximizes producer surplus. **if possible, please answer my questions in typing as it's hard for me to read works in hand-written, thanks
Unlike a nonbinding one, a binding price floor creates a mismatch between quantity supplied and quantity demanded and distorts market equilibrium”. Qualify this statement and make sure to include (what a price floor is, and a graphical example) in your analysis
Consider the market for corn. Suppose that right now, the equilibrium price is considered “too low” by farmers (i.e. suppliers) in order to make a living. These farmers go to their state representatives and convince them to enact a price floor that is above the equilibrium price. Depict this situation graphically. Is there a shortage or a surplus (or does nothing happen)? Now, conceptually, describe how we know with certainty, that consumers are harmed by this policy. Then, describe conceptually how farmers may be harmed or may benefit from this policy. Graphically depict how we know that consumers are harmed while farmers may be better or worse off (ambiguous). If we were to consider the “total surplus” of consumers and farmers, can we say with certainty whether this economy is better or worse off from the price floor?
Consider a market where demand and supply satisfy the following equations QD = 12 – 2 P, QS = 2P. 1.Find the current equilibrium price and quantity. 2.What is the total producer surplus if the market is in equilibrium? The government is considering a minimum price policy to increase producer surplus. 3.Explain by means of graphs how the introduction of a price floor can increase producer surplus. 4.Find the (optimal) price floor that maximizes producer surplus.
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?
In the market for cotton, the quantity demanded, and quantity supplied are expressed mathematically as QD = 700 - 100P and QS = 150P - 300, where P is the price per pound of cotton and Q measures pounds of cotton. Suppose the government sets a price ceiling of $2.50 per pound of cotton. How big is the shortage resulting from the price ceiling? What is the level of consumer surplus with the price ceiling? What is the value of the deadweight loss associated with the price ceiling?
Given the following information Qd = 240 – SP Qs = P Where Qd is the quantity demand, Qs is the quantity supplied and P is the price. Calculate the following: (i) Equilibrium price before the tax (ii) Producer surplus before tax (iii) Consumer surplus before tax (iv) Buyers reservation price (v) Sellers reservation price
Suppose market demand and supply are given by Qd=100-2P and Qs=5+3P. If a price ceiling of $15 is imposed, how much shortage there will be? Show your work. How to know either it is surplus or shortage?