Question

Chapter 6

Search the internet and find a newspaper example of a price ceiling, price floor or tax that has not already been discussed in the power point or textbook. Explain why the article is an example of a price ceiling, price floor or tax and what you can predict will happen to price, quantity demanded and quantity supplied in this market (using the supply and demand model) due to the price control/tax. Why would a government impose a price ceiling, price floor or tax in this market if it leads to inefficiency in the market? Finally, what do you predict will happen to price and quantity exchanged in the market if the price ceiling, price floor or tax is removed from the market.

AND

Chapter 5

Try to come up with an example of one occasion when you experienced consumer surplus and one occasion when you experienced producer surplus (two different experiences because you cannot experience consumer and producer surplus at the same time). Explain in detail. How did your experiences affect you personally and how you felt when you purchased or sold the product? Also, explain what would happen to price, quantity, producer surplus, consumer surplus and deadweight loss when either a price floor, price ceiling or tax is imposed on a market (choose one). How would you explain the concept of deadweight loss in your own words?

Answer 1

Answer A