Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184890
Author: PINDYCK
Publisher: PEARSON
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Question
Chapter 9, Problem 5RQ
To determine
Changes in price.
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Students have asked these similar questions
Explain why economists usually oppose controls on prices.
Which government policy measure would reduce the price of a product and increase the quantity traded in the market? Pick a,b,c or d
a. The setting of a maximum price
b. The setting of a minimum price
c. The imposition of a tax
d. The granting of subsidy
Based on your opinion, and what was discussed in the textbook, do you think it makes sense for the government to alter prices in a market using price ceilings (such as rent control) and price floors (such as minimum wage or maintaining a high price for agricultural products
Chapter 9 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
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- Why do most economists oppose price ceilings and price floor? What are their negative consequences?arrow_forwardThe government of Brazil wishes to regulate the grocery bags by preventing the current prices from rising, what actions should it take? * a. Set a price ceiling above the equilibrium price b. Impose a direct tax on landlords c. Grant a subsidy to landlords d. Set a price ceiling below the equilibrium pricearrow_forwardIf people can't afford the equilibrium price for a good, would it be a good idea for the government to force the producer to produce it and give it to the poor people? Why or why not?arrow_forward
- A price ceiling is not binding if what? A. people does not agree to abide by it B. the equilibrium price is below the ceiling C. the equilibrium price is above the ceiling D. it has no legal enforcement mechanismarrow_forwardWhat happens to the prices of items like generators, fuel, plywood and ice during natural disasters? Explain. Should government impose price controls? If the controls keep the prices from rising, how will this affect the flow of these items into the disaster area? (SUPPLY AND DEMAND)arrow_forwardIf the government were to set a price floor for fresh jumbo shrimps above the market equilibrium, then we would expect, relative to the market outcome, a. fresh jumbo shrimp supply decreases b. a surplus for fresh jumbo shrimps c. a shortage of fresh jumbo shrimps d. nothing change because the price floor is not bindingarrow_forward
- The city of Montrose recently imposed a price ceiling on cookies, limiting the price of a cookie to $1 each. Before the price ceiling was imposed, the equilibrium price of a cookie was $2 each. All of the following are likely consequences of this price ceiling EXCEPT Choose 1 answer: (Choice A) a black market for cookies (Choice B) higher opportunity costs (Choice C) an increase in the size of cookies (Choice D) a decrease in cookie quality (Choice E) shortagesarrow_forwardWhat will happened to Equilibrium Price and quantity if a) Government imposes, import tax to the importers on imported cars b) more cakes are demanded during the month of december due to Christmas. Identify new readjusted market equilibrium, readjusted equilibrium price and quantity for each eventarrow_forwardif the price ceiling of a good is set AT the Equalibrium Price, is it non binding?arrow_forward
- Taxes on producers cause the equilibrium price of a good toarrow_forwardHow does a price ceiling below equilibrium affect the market? How does a price ceiling above equilibrium affect the market? Discuss how rent control, one of the most popular price ceilings, specifically affects the market for housing.arrow_forwardChoices for the following labelled numbers—- 1. Price ceiling, quota, price floor, tax 2. Up ward or downward 3. Upward or downwardarrow_forward
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