Homework Answers
Price floor is the minimum limit on the price of a good. If the price floor being imposed is above the equilibrium price, the price floor is binding.
Price ceiling is the maximum limit on the price of a good. If the price ceiling being imposed is above the equilibrium price, the price ceiling is non binding .
Using these concepts to get :
Statement 1 - Price ceiling and binding
Statement 2- Price ceiling and binding
Statement 3- Price floor and non-binding
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Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00...
1. The language of price controls Suppose that, in a competitive market without government regulations, the...
1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding. Price Control Binding or Not Statement Due to new regulations, gas stations that would like to pay better wages in order to hire more workers are prohibited...
Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon.
The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding. The government prohibits gas stations from selling gasoline for more than $3.40 per gallon. There are many teenagers who would like to work at gas stations, but they are not hired due...
1. The language of price controls Suppose that, in a competitive market without government regulations, the...
1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon. Complete the folowing table by indicating whether each of the statements is an example of a price ceiling or a price Rloor and whether it is nonbinding Price Control Binding or Not Statement Due to new regulations, grocery stores that would like to pay better wages in order to hire more workers are prohibited from doing...
1. The language of price controls Suppose that, in a competitive market without government regulations, the...
1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of rental cars is $58 per day. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding. Statement Price Control Binding or Not The government prohibits car-rental companies from renting out rental cars for more than $87 per day. Due to new regulations,...
Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon.
1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding.2 Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value...
Suppose that, in a competitive market without government regulations, the equilibrium price of donuts is $1.50 each.
The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of donuts is $1.50 each. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding.
2. The language of price controls Consider the market for hamburgers. Suppose that, in a competitive...
2. The language of price controls Consider the market for hamburgers. Suppose that, in a competitive market without government regulations, the equilibrium price of hamburgers is $5 each, and employees at fast food restaurants earn $27.50 per hour. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it results in a shortage or a surplus or has no effect on the price and quantity that...
The demand schedule given below is for the market for gasoline in a town. The marginal...
The demand schedule given below is for the market for gasoline in a town. The marginal cost of supplying gasoline is constant at $2 per gallon. Assume that there are no fixed costs. part a: If the market is competitive what will be the price charged for a gallon of gasoline and what will be the gas stations economic profits? part b: If there is only one gas station in town what price will it charge and what will be...
Suppose the gasoline market is competitive and that the government grants a subsidy to the industry...
Suppose the gasoline market is competitive and that the government grants a subsidy to the industry of 20 cents per gallon. Demonstrate and explain how the subsidy will affect price, output, and consumer and producer surplus. Show the dead-weight (or social) loss from the subsidy.
Homework (Ch 04) 1. The link between resource and product markets The following graph represents ...
1. The link between resource and product markets The following graph represents the labor market in the insurance industry in a hypothetical economy. Suppose the insurance board raises the qualification requirements for insurance brokers in this economy. As a result, many entry-level insurance brokers decide to switch to another industry. Assuming all other things are constant, show the effect of this tighter requirements on the labor market for the insurance industry by shifting one or both of the curves in the following...
1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding. Price Control Binding or Not Statement Due to new regulations, gas stations that would like to pay better wages in order to hire more workers are prohibited...
1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon. Complete the folowing table by indicating whether each of the statements is an example of a price ceiling or a price Rloor and whether it is nonbinding Price Control Binding or Not Statement Due to new regulations, grocery stores that would like to pay better wages in order to hire more workers are prohibited from doing...
1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of rental cars is $58 per day. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding. Statement Price Control Binding or Not The government prohibits car-rental companies from renting out rental cars for more than $87 per day. Due to new regulations,...
2. The language of price controls Consider the market for hamburgers. Suppose that, in a competitive market without government regulations, the equilibrium price of hamburgers is $5 each, and employees at fast food restaurants earn $27.50 per hour. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it results in a shortage or a surplus or has no effect on the price and quantity that...
The demand schedule given below is for the market for gasoline in a town. The marginal cost of supplying gasoline is constant at $2 per gallon. Assume that there are no fixed costs. part a: If the market is competitive what will be the price charged for a gallon of gasoline and what will be the gas stations economic profits? part b: If there is only one gas station in town what price will it charge and what will be...
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