Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 2, Problem 5MC
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Which of the following was used in class as an example of a Price Floor?
Select one:
a.
dairy price supports
b.
gasoline price controls in the 1970’s
c.
rent vouchers
d.
rent control
In India, to protect the farmers from the low price, the government decided to increase the price of farm products. Accordingly, the government increased the price and fixed the price above the equilibrium price. What do you call this type of pricing?
a.
Price ceiling
b.
Market price
c.
Maximum price
d.
Price floor
Describe in your words :
Shortage and Surplus
Price Floor and Price Ceiling
Chapter 2 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
- The government of Brazil wishes to regulate the grocery bags by preventing the current prices from rising, what actions should it take? * a. Set a price ceiling above the equilibrium price b. Impose a direct tax on landlords c. Grant a subsidy to landlords d. Set a price ceiling below the equilibrium pricearrow_forwardA recent study found that the demand an supply for Frisbies schdules are as follows:a.What are the equilibrium price and quantity of Frisbees?b.Frisbee manufacture persuade the government that frisbee production improves scientists'understanding of areodynamics and thus is important for national security.a concern Congress votes to impose a price floor $2 above the equilibrium price.What is the new market price?How many Frisbees are sold?c.Irate college students march on washington and demand a reduction in the price of Frisbees.An even more concerned Congress votes to repeal the price floor and impose a price ceiling $1 below the former price floor.What is the new market price?How many Frisbees are sold?arrow_forwarda. Price ceilings create shortages if they are set b. Which of the following are price ceilings? the minimum wage price controls on prescription drugs an agricultural price support rent control below the equilibrium price.arrow_forward
- The government imposes a price ceiling below the equilibrium price. Which of the following are the effects of this price ceiling? A. Shortage B. Deadweight loss C. Inefficiently low quality of the good D. Both A and B E. All of the above F. None of the abovearrow_forwardA price ceiling is not binding if what? A. people does not agree to abide by it B. the equilibrium price is below the ceiling C. the equilibrium price is above the ceiling D. it has no legal enforcement mechanismarrow_forwardWhat is the difference between a price floor and a price ceiling?arrow_forward
- 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)arrow_forwardWhich change would cause a decrease in price and a decrease in the quantity sold? Pick a,b,c, or d a. The granting of a subsidy to producers of the product b. The removal of a price floor on the product maintained by government legislation and rationing c. The granting of a subsidy to consumers of the product d. The removal of a price ceiling on the product maintained by government legislation and purchases of surplusesarrow_forwardExplain the effects of the price ceiling in economics give only two points?arrow_forward
- Venezuelans organize to overcome food shortages The government of Venezuela controls the price of food and there are shortages of milk, rice, coffee, pasta, sugar, corn flour and cooking oil. Eggs have disappeared from store shelves. Source: www.teleSURtv.net/english, November 27. 2015 The price controls described in the news clip are O A. price ceilings OB. price floors The graph shows the demand and supply of food in Venezuela. Draw a line to show the price control described in the news clip. Draw an arrow at the price control to show the shortage or the surplus created by the price control. Give it the appropriate label. 60- 50- 40- K 30- 20- 10 0+ Price (bolivars per unit) 0 200 300 400 500 Quantity (units of food) >>> Draw only the objects specified in the question. 100 600 700 SOU Next mparrow_forwardWhat is the objective of a price ceiling? a. To encourage the growth of the economy b. To stabilize the decreasing of prices c. To help sellers d. To control increasing prices of productsarrow_forwardCan you help me draw a supply and demand graph and find out where I would put a price floor for helping a producer? And at the floor can you label the quantity supplied and thequantity demanded?arrow_forward
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