Question

econ hw please help thank you!

CLILINGS AND PRICE FLOORS licymakers are more likely to impose a price ceiling: above equilibrium price in order to protect buyers from high prices. above equilibrium price in order to protect sellers from low prices. below equilibrium price in order to protect buyers from high prices. below equilibrium price in order to protect sellers from low prices. b. b. Policymakers are more likely to impose a price floor: above equilibrium price in order to protect buyers from high prices. above equilibrium price in order to protect sellers from low prices. below equilibrium price in order to protect buyers from high prices. d. below equilibrium price in order to protect sellers from low prices. , while a binding price floor causes a A binding price ceiling causes a market market a shortage; shortage b. surplus, surplus shortage; surplus surplus; shortage Use the graph below to answer questions 4 and 5. Supply Price ($) $10.00 ------ $7.50 - $5.00 - Demand 150 180 200 225 250 Quantity If there is a price floor set at $10.00, the quantity bought and sold in this market will be equal to and there will be a market a. 150; shortage 150; surplus b. 225; shortage d. 225; surplus there is a price ceiling set at $5.00, the quantity bought and sold in this market will be equal to and there will be a market 180; shortage 180; surplus 250; shortage d. 250; surplus Chapter 7 Assignments 141

Answer 1

1. Option c.

An effective price ceiling is set below equilibrium in order to protect buyers interest

2. Option b.

An effective price floor is set above equilibrium in order to protect sellers

3. Option a.

Price ceiling causes shortage as quantity demanded is more than quantity supplied

Price floor causes surplus as quantity supplied is more than quantity supplied demanded

4. Option c.

Qs = 225, Qd = 150, Qs-Qd = 225-150 = 75 surplus

5. Option a

Qs = 180, Qd = 250, Qs-Qd = 180-250 = -70 shortage