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 32P
Imagine that to preserve the traditional way of life in small fishing villages, at government decides to impose a
- 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.
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Imagine that to preserve the traditional way of life in small fishing villages, a 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 the market?
Suggest some policies other than the price floor to make it possible for small fishing villages to continue.
Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it results in a shortage or a surplus or has no effect on the price and quantity that prevail in the market.
The government has instituted a legal minimum price of $2.30 per gallon for milk.
The government prohibits grocery stores from selling milk for more than $2.30 per gallon.
Due to new regulations, grocery stores that would like to pay better wages in order to hire more workers are prohibited from paying more than $16.50 per hour.
A surge in bread prices causes the government to worry that many poor individuals will no longer be able to afford a basic meal. To combat the surge, the government decides to set an effective (or binding) price ceiling. Draw the market for bread below with the equilibrium price, price ceiling, and label the surplus or shortage. (Make sure to label each axis on the graph!) List three possible unintended side effects of this policy. Be specific.
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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