Bundle: Principles of Macroeconomics, Loose-leaf Version, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
8th Edition
ISBN: 9781337378994
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 6, Problem 4QR
To determine
The reason why economists oppose price controls.
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Explain why economists usually oppose controls on prices.
What impact do policy interventions have on the supply and demand equilibrium for a product?
Explain why economist usually oppose controls on prices.
Chapter 6 Solutions
Bundle: Principles of Macroeconomics, Loose-leaf Version, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
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Similar questions
- If there is a decrease in supply and demand, how will equilibrium price and quantity be affected?arrow_forwardWhy would a shift in supply or demand happen as a result in a market equilibrium with higher prices but lower sales volume?arrow_forwardhow can price controls be used to avoid prices from increasing furtherarrow_forward
- Why is it difficult for producers of oil to just raise the price of oil if they want a price increase?arrow_forwardGasoline "prices at the pump" go up and down, and Oil "costs per barrel" go up or down, but they do so at different rates and even in opposite directions sometimes. We want to think that demand and supply control prices where the cost of crude oil is set by the same economic conditions that determine the gas price. What are these mismatched trends (graphs of each are shown in the following web links) telling us about how demand and supply work in the market? http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EER_EPMRU_PF4_Y35NY_DPG&f=A http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=Aarrow_forwardIf a decrease in demand is smaller than a decrease in Supply, what happens to an equilibrium price and output sales?arrow_forward
- The price of a gallon of gas moves up and down often. What this means is that, most of the time, the gasoline market is not in equilibrium. When its price goes up, what might be happening to cause this? When the price goes down, what might be happening to cause this?arrow_forwardOver the years, the demand for textiles in Country A has grown in spite of rising prices. How would you reconcile this fact with the law of demand?arrow_forwardSuppose demand decreases and supply decreases. Which of the following will happen? Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease. Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase. Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease. The change in equilibrium price and quantity cannot be determined.arrow_forward
- Can you propose a policy that would induce the market to supply more rental housing units?arrow_forwardDescribe how equilibrium is found. Describe how a shift of the demand or supply curve can affect equilibrium.arrow_forwardIf the government increases the excise tax on a gallon of gasoline we can expect the supply curve to shift rightward, quantity demanded to fall, and price to rise. True or Falsearrow_forward
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