Macroeconomics
11th Edition
ISBN: 9781260506891
Author: Colander
Publisher: MCG
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Question
Chapter 5.A, Problem 9QE
(a)
To determine
Impact of price of $3.
(b)
To determine
Impact of price of $1.50.
(c)
To determine
Impact of price of $2.25.
(d)
To determine
Impact of price of $2.50.
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Students have asked these similar questions
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.
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 ceiling
Consider a market where demand and supply satisfy the following equations
QD = 12 – 2 P,
QS = 2P.
The government is considering a minimum price policy to increase producer surplus.
Explain by means of graphs how the introduction of a price floor can increase producer surplus.
Find the (optimal) price floor that maximizes producer surplus.
Chapter 5 Solutions
Macroeconomics
Ch. 5.1 - Prob. 1QCh. 5.1 - Prob. 2QCh. 5.1 - Prob. 3QCh. 5.1 - Prob. 4QCh. 5.1 - Prob. 5QCh. 5.1 - Prob. 6QCh. 5.1 - Prob. 7QCh. 5.1 - Prob. 8QCh. 5.1 - Prob. 9QCh. 5.1 - Prob. 10Q
Ch. 5.A - Prob. 1QECh. 5.A - Prob. 2QECh. 5.A - Prob. 3QECh. 5.A - Prob. 4QECh. 5.A - Prob. 5QECh. 5.A - Prob. 6QECh. 5.A - Prob. 7QECh. 5.A - Prob. 8QECh. 5.A - Prob. 9QECh. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - Prob. 3QECh. 5 - Prob. 4QECh. 5 - Prob. 5QECh. 5 - Prob. 6QECh. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QECh. 5 - Prob. 11QECh. 5 - Prob. 12QECh. 5 - Prob. 13QECh. 5 - Prob. 14QECh. 5 - Prob. 15QECh. 5 - Prob. 16QECh. 5 - Prob. 17QECh. 5 - Prob. 1QAPCh. 5 - Prob. 2QAPCh. 5 - Prob. 3QAPCh. 5 - Prob. 4QAPCh. 5 - Prob. 5QAPCh. 5 - Prob. 1IPCh. 5 - Prob. 2IPCh. 5 - Prob. 3IPCh. 5 - Prob. 4IPCh. 5 - Prob. 5IPCh. 5 - Prob. 6IPCh. 5 - Prob. 7IPCh. 5 - Prob. 8IPCh. 5 - Prob. 9IPCh. 5 - Prob. 10IPCh. 5 - Prob. 11IPCh. 5 - Prob. 12IPCh. 5 - Prob. 13IPCh. 5 - Prob. 14IP
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