Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 4, Problem 11SCQ
Select the correct answer. A
demand - supply
- both
- neither
Illustrate your answer with a diagram.
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Students have asked these similar questions
Identify the most accurate statement. A price floor will have the largest effect if it is set: a. substantially above the equilibrium price b. slightly above the equilibrium price c. slightly below the equilibrium price d. substantially below the equilibrium price Sketch all four of these possibilities on a demand and supply diagram to illustrate your answer.
What is meant by a price floor?
Calculate the effect of a price floor on the equilibrium priceand quantity.
Chapter 4 Solutions
Principles of Economics 2e
Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - Why is a living wage considered a price floor?...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - If a usury law limits interest rates to no more...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Identify the most accurate statement. A price...Ch. 4 - A price ceiling will have the largest effect:...
Ch. 4 - Select the correct answer. A price floor will...Ch. 4 - Select the correct answer. A price ceiling will...Ch. 4 - What is die price commonly called in the labor...Ch. 4 - Are households demanders or suppliers in the goods...Ch. 4 - Name some factors that can cause a shift in the...Ch. 4 - Name some factors that can cause- a shift in the...Ch. 4 - How do economists define equilibrium in financial...Ch. 4 - What would be a sign of a shortage in financial...Ch. 4 - Would usury laws help or hinder resolution of a...Ch. 4 - Whether the product market or the labor market,...Ch. 4 - Other than the demand for labor, what would be...Ch. 4 - Suppose that a 5 increase in the minimum wag...Ch. 4 - Under what Circumstances would a minimum wage be a...Ch. 4 - Suppose the U.S. economy began to grow more...Ch. 4 - If the government imposed a federal interest rate...Ch. 4 - Why are the factors that shift the demand for a...Ch. 4 - During a discussion several year; ago on building...Ch. 4 - Identify each of the following as involving either...Ch. 4 - Predict how each of the following events will...Ch. 4 - Predict how each of the following economic changes...Ch. 4 - Table 4.6 shows the amount of savings and...Ch. 4 - Imagine that to preserve the traditional way of...Ch. 4 - What happens to the price and the quantity bought...
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Similar questions
- Consider the following: “If a price is not an equilibrium price, there is a tendency for price to move to its equilibrium level. Regardless of whether the price is too high or too low to begin with, the adjustment process will increase the quantity of the good traded.” Determine whether the following statement is true, false, or uncertain. Explain your answer carefully using a supply and demand diagram.arrow_forwardWhy is it difficult for producers of oil to just raise the price of oil if they want a price increase?arrow_forwardExplain and illustrate each of the following statements using supply-and-demand diagrams. Show the impact on equilibrium price and quantity. i. Laptops – There is increased access to wireless technology and lighter-weight products are available. Microchips a component of laptops are cheaper as new technology has come online. marks] ii. Lychee - Production in Canada totaled 1.5 million barrels in 2018, a 40 percent increase from 2017. Demand increased by even more than supply, over the same period. iii. Gasoline - The price of sedans rises and electric cars have become more popular iv. Wool coats: New knitting machines are invented and insect infestation destroys most of the cotton crop in Canadaarrow_forward
- Which of the following (A or B) would graphically show an increase in supply?arrow_forwardDuring a discussion several years ago on building a pipeline to Alaska to carry natural gas, the U.S. Senate passed a bill stipulating that there should be a guaranteed minimum price for the natural gas that would flow through the 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 the 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 the market? Suggest some policies other than the price floor that the government can pursue if it wishes to encourage drilling for natural gas and for a new pipeline in Alaska.arrow_forwardThe graph shows a price floor (pflr) that at first happens to lie exactly at the equilibrium price for corn. The floor is intended to shore up the price of corn but is currently nonbinding. Then a new law about the use of (corn-derived) ethanol in gasoline causes a change in demand. Drag the appropriate curve to illustrate what happens if the change causes the floor to become binding.arrow_forward
- List three reasons why a demand curve could shift upwardsarrow_forwardDetermine a scenario where the supply curve would shift (either increase or decrease).arrow_forwardIf a price is not an equilibrium price, there is a tendency for it to move to its equilibrium level. Regardless of whether the price is too high or too low to begin with, the adjustment process will increase the quantity of the good purchased”. Explain using a demand and supply digram.arrow_forward
- Can you confirm please? and, would the price floor cause inefficiency in the market?arrow_forwardThe difference between market demand and aggregate demand is that: Answers: A. Aggregate demand applies to all goods in an economy and market demand applies to a specific good. B. Aggregate demand applies to a specific good, and market demand does not. C. Policy levers work through market demand but not aggregate demand. D. Market demand applies to all individuals, and aggregate demand does not.arrow_forwardIf the price floor is not enforced, firms competition will force the price ______________________. back to its equilibrium to decrease to increase no change at allarrow_forward
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