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 9SCQ
Identify the most accurate statement. A
- substantially above the
equilibrium price - slightly above the equilibrium price
- slightly below the equilibrium price
- substantially below the equilibrium price
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Students have asked these similar questions
If the price floor is not enforced, firms competition will force the price ______________________.
back to its equilibrium
to decrease
to increase
no change at all
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.
Can you confirm please? and, would the price floor cause inefficiency in the market?
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
- During 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_forwardA nonbinding price floor has which of the following consequences? Group of answer choices The quantity demanded will always exceed the quantity supplied. There will be upward pressure on prices until quantity demanded equals quantity supplied. The quantity demanded will always be smaller than the quantity supplied. There are no consequences to a nonbinding price floor. There will be downward pressure on prices until quantity demanded equals quantity supplied.arrow_forwardA binding price floor will, in the short run, Group of answer choices push the price down as a result of the surplus. create a shortage of the good or service. shift the supply curve to the right. shift the demand curve to the left. increase the quantity supplied and decrease the quantity demanded.arrow_forward
- What is the terminology for this definition below? Prices rise because more goods and services are trying to be purchased than the economy can producearrow_forwardThe graph above represents a competitive market for a product where the government now has introduced a price floor of C. Which area in the graph represents the producers' sales revenue after the imposition of the price floor?arrow_forwardWhat is meant by a price floor?arrow_forward
- Calculate the effect of a price floor on the equilibrium priceand quantity.arrow_forwardUse the Labor Market graph to determine which of the following statements is most true. A) The increase will not have an impact because it is a nonbinding price floor. B) The increase will not have an impact because it is a nonbinding price ceiling. C) Due to the increase, less workers will have jobs. D) Due to the increase, more workers will have jobs. This is a Labor Market graph. The horizontal black lines represent a minimum wage law increase from $7 to $9.arrow_forwardThe following are correct statements about a Price Floor, EXCEPT: Question 9 options: It is a regulated price above the equilibrium price It creates an excess of supply in the market. It will for sure increase total consumer's surplus. It creates a Dead Weight Loss.arrow_forward
- An effective price ceiling is one that causes the market to ______________________when it is imposed. * stay at equilibrium move away from equilibrium move closer to equilibrium nothing can be said without additional informationarrow_forwardGiven these supply and demand relationships drawn, if the actual price is $14, which of the following statements are TRUE? At $14, the demand is 16 At $14, the quantity demanded is 16 The equilibrium quantity s 12 At $14, the quantity supplied is 16 The equilibrium quantity is 16 At $14, the supply is 16 The equilibrium price is $14 At $14, the quantity supplied is 9 At $14, the supply is 9 The equilibrium price is $17 At the equilibrium price supply and demand would be equal At a price of $17, the quantity demanded and quantity supplied would be equal At $14 there is a market shortage of 7 units At $14 there is a market shortage of 4 units At $14 there is a market surplus of 7 units. Supply and Demand are equal at P=17.arrow_forwardA price ceiling will have the largest effect: a. substantially below the equilibrium price b. slightly below the equilibrium price c. substantially above the equilibrium price d. slightly above the equilibrium price. Sketch all four of these possibilities on a demand and supply diagram to illustrate your answer. Select the correct answer. A price floor will usually shift: a. demand b. supply c. both d. neither Illustrate your answer with a diagram.arrow_forward
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