The government decides that a specific scarce good should be provided for everyone who wants it at less than market price and passes a law making it illegal to buy or sell the good. What would happen in this market if the law were removed? (hints: price ceiling or price floor)
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The government decides that a specific scarce good should be provided for everyone
who wants it at less than market price and passes a law making it illegal to buy or sell
the good. What would happen in this market if the law were removed? (hints:
ceiling
Step by step
Solved in 2 steps
- 1. What is a good or service that you think should have a price ceiling (maximum price) 2. What is a good or service that you think should have a price floor (minimum price)Explain what would be likely to happen if the government placed a price floor on milk. Suppose that the price of milk is $4/gallon, and the government prohibits anyone from selling milk for less than $5/gallon. Your answer should consist of a complete well-written paragraph using complete sentences as well as a supply and demand diagram.NAME SUPPLY AND DEMAND - 3.5.6 Price Ceilings and Price Floors Homework DIRECTIONS Each of these three news articles describes either a government-imposed price ceiling or price floor. Read the title and excerpt, and then answer the questions that follow. RUSSIA MAY SET PRICE CEILING FOR STAPLE FOODS AS DROUGHT FUELS INFLATION 14 August 2010 - by Anton Doroshev & Maria Levitov (Bloomberg) Russia may set retail price ceilings for basic foods, Deputy Industry and Trade Minister Stanislav Naumov said. The worst drought in at least 50 years has slashed harvests across Russia, fueling inflation..Naumov told reporters today in Moscow "It's necessary to institute a maximum retail price for those products that are in short supply".President Dmitry Medvedev's top economic advisor said he opposes imposing maximum prices. 1) Suppose the following data represents the market for Russian staple foods. Use this data to construct the graph for this market. 2) At equilibrium, what are the following? a)…
- In Camarillo, if the equilibrium price of cooking oil is $5.90 per pound, and if the government adopts a price floor for cooking oil at $6.15 per pound, what will happen?The following graph shows market for printers at equilibrium at price of $100 and quantity of 100. A. Determine the effects of a $90 price ceiling on quantity demanded, quantity supplied, and quantity exchanged in the market. B. As a result of this price ceiling there will be how much shortage or Surplus in this market? C. Show the effects of the price ceiling on the graph. You can draw the graph on paper and upload an image as a PNG, JPEG or PDF document. Please keep in mind that I can not open the files with HEIC extension. D. Show the deadweight loss of the price ceiling on your graph. P 130 120 110 100 S 90 80 70 60 50 40 50 60 70 80 90 100 110 120 Q DQuestion The market for disposal digital cameras has the following demand and supply schedules: a. Graph the demand and supply curves. What are the equilibrium price and quantity in this market? b. Explain what would happen if the market price is set at $30, and show this on the graph. c. Explain what would happen if the market price is set at $15, and show this on the graph.
- The table below sets out the demand and supply schedules for college meals. Price (dollars per meal) 4 5 6 7 8 Quantity demanded (meals per week) 3,000 2,750 2,500 2,250 Quantity supplied 2,000 1,500 2,000 2,500 3,000 3,500 If the college put a price ceiling on meals at $7 a meal, what is the price students pay for a meal? How many meals do they buy? The price of a meal is $6 per meal and students buy 2,500 meals per week. The price of a meal is $5 per meal and students buy 2,750 meals per week. The price of a meal is $8 per meal and students buy 2,000 meals per week. The price of a meal is $7 per meal and students buy 2,250 meals per week.The table shows the demand and supply schedules for hot chocolate. What is the market equilibrium in the hot chocolate market? The equilibrium price is $a cup. The equilibrium quantity is cups a day. Price (dollars per cup) 1.10 1.45 1.80 2.15 2.50 Quantity demanded Quantity supplied (cups per day) 200 175 150 125 100 110 130 150 170 190Using the market for nursing homes and care homes for older people, suppose that the market is in equilibrium. Then, there is an increase in wages for healthcare workers. Would there be a temporary shortage or surplus in the market? Will there be a change in quantity supplied or quantity demanded after the price rises to get to your new equilibrium Shortage = A Surplus = B Quantity Supplied = C Quantity Demanded D Instructions: State whether you think it will be A, B, C, or D. The answer will be combination of two, for example if you think there is a shortage and a change in quantity supplied, you would have AC. In your answers only include the letter the two capital letters. Make sure choose between AB first, then between CD. Answer:
- The federal government “supports” the price of wheat by paying farmers not to plant wheat on some of their land. What will happen to the equilibrium price and the equilibrium quantity?Draw a correctly labelled demand and supply graph for the market for toilet paper in the US with an equilibrium price of $20 per pack. During the pandemic, more people were buying toilet paper in fear that it would run out. On a the same graph, show how this affects the market for toilet paper. Explain your answer. Now impose a price ceiling at $15 per pack. What would be the impact of the price ceiling on the quantity demanded and quantity supplied? Illustrate this on the graph and explain. Will the price ceiling create a shortage or excess supply? Explain. Who would benefit from the price ceiling and who would be harmed? Explain your answer. Let the graph guide your thinking. Don’t start with your gut reaction! Let's suppose the government now impose a price floor of $15 for a pack of toilet paper. Draw the market for toilet paper with the new price floor of $15 and illustrate the impact on quantity demanded and quantity supplied Give an example of a price floor and who would…Let the supply and demand for coffee be given by the following schedule. Price: 3, 4, 5, 6, 7, 8, 9, 10, 11 Quantity Supplied: 100, 200, 300, 400, 500, 600, 700, 800, 900 Quantity Demanded: 900, 800, 700, 600, 500, 400, 300, 200, 100 After heavy lobbying by coffee-addicted econ instructors, the government decides to impose a price ceiling on coffee at $5. (All answers are integers, no units. ) 1. What quantity of coffee is efficient? 2. What quantity will be traded with the price ceiling? 3. Assume that coffee is rationed by waiting in line. If all buyers have a value of time equal to $0.20 per minute, how long will they need to wait in line to get coffee (in minutes)? 4. What is the total cost of waiting in line?