Homework Answers
Black market occurs when there is excess demand but lack of supply . At market equilibrium there will be no black market . When there is a price ceiling imposed and equilibrium price is higher than ceiling , quantity demanded is higher than quantity supplied at the ceiling . In this case there is a chance of black market . Some consumers illegally buy the good at higher price than ceiling and suppliers prefer selling to them in order to make more profits .
Answer : C) the government imposes a price ceiling below the market clearing price .
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. A black market may occur when A) the government imposes a price ceiling above the...
If the government imposes a price ceiling above the equilibrium price, then the equilibrium price will...
If the government imposes a price ceiling above the equilibrium price, then the equilibrium price will a) rise Ob) fall c) remain the same O d) double
Suppose that, to make bread affordable for low-income consumers, the government imposes a price ceiling on bread.
Suppose that, to make bread affordable for low-income consumers, the government imposes a price ceiling on bread. a. In the graph below, adjust the price line to show a binding price ceiling. b. Which of the following are potential consequences of a price ceiling on bread? a decline in the quality of bread a decrease in the opportunity cost of searching for bread the development of a black market in bread a shortage of bread
Consider the below market supply and demand curve a)The government imposes a price ceiling of £0.2...
Consider the below market supply and demand curve
a)The government imposes a price ceiling of £0.2 in the market
for lemons. Define price ceiling
and describe the impact of a £0.2 price ceiling on the market for
lemons
b.Discuss the reasons why governments sometimes choose to
control prices.
Market's Supply Price Market Demand Quantity Price Quantity C) 0.1 0.2 0.3 0.4 0.5 0 Infinity 0.1 0.2 0.3 0.4 0.5 C) 30 10) 17 20 25 17
When a government imposes a price ceiling below the market price on a product or service,...
When a government imposes a price ceiling below the market price on a product or service, which of the following happens? a.Total consumer surplus rises because consumers now pay less for the product b.The total amount of the product or service that is traded in the market rises due to the lower price c.A shortage of supply relative to demand results A per unit tax on a good which is levied on the consumer will usually cause which of the...
11) Refer to the figure below, which shows the market for vitamins. Suppose the government imposes...
11) Refer to the figure below, which shows the market for vitamins. Suppose the government imposes a price ceiling of Py. How will the price ceiling affect the quantity supplied, quantity demanded and quantity exchanged? Price Supply Price ceiling Demand Quantity of vitamins 12) Refer to the figure below, which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded and quantity exchanged? Price (dollars)...
If the government imposes a maximum price in a market that is below the equilibrium price:...
If the government imposes a maximum price in a market that is below the equilibrium price: O A. total surplus in the market does not change. O B. total surplus in the market increases. O C. total surplus may increase or decrease, depending on whether costs are increasing or decreasing in production. O D. total surplus in the market decreases
Consider a market in which the government imposes a price ceiling. Assume that neither supply nor...
Consider a market in which the government imposes a price ceiling. Assume that neither supply nor demand is perfectly elastic nor perfectly inelastic. Which of the following groups will always gain from a price ceiling? Consumer Producers The government Society as a whole, because total surplus will increase No group will always gain from a price ceiling
Then assume the government imposes a price floor of p2. How does this affect the market?
Consider the market for soybeans illustrated in the figure below. Assume the market is initially in equilibrium at point A. Then assume the government imposes a price floor of p2. How does this affect the market?The price floor results in an equilibrium where supply equals demand. The price floor results in a surplus of corn. The price floor is not binding and has no effect The price floor results in a shortage of corn
Suppose the government imposes a price floor of $28 in the market. If the sellers with...
Suppose the government imposes a price floor of $28 in the
market. If the sellers with the lowest cost are the ones who sell
the good and the government does not purchase any excess units
produced, then the total surplus will be
a. $400
b. $800
c. $1,120
d. $1,184
+ 16+ **** 12+ 8 8 16 24 32 40 48 56 64 72 80 88 96 Q
Assume the market is initially in equilibrium at point A. Then assume the city imposes a price ceiling of pz
Consider the market for apartments in New York City illustrated in the figure below. Assume the market is initially in equilibrium at point A. Then assume the city imposes a price ceiling of pz. How does this affect the market? The price ceiling results in a shortage of apartments The price ceiling results in an equilibrium where supply equals demand. The price ceiling is not binding and has no effect The price ceiling results in a surplus of apartments
If the government imposes a price ceiling above the equilibrium price, then the equilibrium price will a) rise Ob) fall c) remain the same O d) double
Consider the below market supply and demand curve
a)The government imposes a price ceiling of £0.2 in the market
for lemons. Define price ceiling
and describe the impact of a £0.2 price ceiling on the market for
lemons
b.Discuss the reasons why governments sometimes choose to
control prices.
Market's Supply Price Market Demand Quantity Price Quantity C) 0.1 0.2 0.3 0.4 0.5 0 Infinity 0.1 0.2 0.3 0.4 0.5 C) 30 10) 17 20 25 17
11) Refer to the figure below, which shows the market for vitamins. Suppose the government imposes a price ceiling of Py. How will the price ceiling affect the quantity supplied, quantity demanded and quantity exchanged? Price Supply Price ceiling Demand Quantity of vitamins 12) Refer to the figure below, which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded and quantity exchanged? Price (dollars)...
If the government imposes a maximum price in a market that is below the equilibrium price: O A. total surplus in the market does not change. O B. total surplus in the market increases. O C. total surplus may increase or decrease, depending on whether costs are increasing or decreasing in production. O D. total surplus in the market decreases
Suppose the government imposes a price floor of $28 in the
market. If the sellers with the lowest cost are the ones who sell
the good and the government does not purchase any excess units
produced, then the total surplus will be
a. $400
b. $800
c. $1,120
d. $1,184
+ 16+ **** 12+ 8 8 16 24 32 40 48 56 64 72 80 88 96 Q
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