1. Give an example of a market (it can be of any good or service).
2. a) Determine a scenario where government imposes a binding quota.
b) What are the consequences of this restriction on
c) What happens to economic surplus because of a)? Is there
d) Draw the graph. Highlight
3. a) Determine a scenario where government imposes a binding restriction on price (ceiling or floor).
b) What are the consequences of this restriction on quantity? (surplus/shortage) Explain.
c) What happens to economic surplus because of a)? Is there deadweight loss?
d) Draw the graph. Highlight consumer surplus, producer surplus, and deadweight loss.
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