2. The language of price controls Consider the market for milk. Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon, and employees at grocery stores eam $21.50 per hour. Complece the following table by indicating whecher each of the statements is an example of a price ceiling or a price floor and whecher it results in a shortage or a surplus or has no effect on the price and quantity that prevail in the market. Price Control Effect Statement The government prohibits grocery stores from selling milk for more than $2.30 per gallon. There are many teenagers who would like to work at grocery stores, but the minimum- wage law sets the hourly wage at $25.00. The government has instituted a legal minimum price of $2.30 per gallon for milk.

2. The language of price controls Consider the market for milk. Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon, and employees at grocery stores eam $21.50 per hour. Complece the following table by indicating whecher each of the statements is an example of a price ceiling or a price floor and whecher it results in a shortage or a surplus or has no effect on the price and quantity that prevail in the market. Price Control Effect Statement The government prohibits grocery stores from selling milk for more than $2.30 per gallon. There are many teenagers who would like to work at grocery stores, but the minimum- wage law sets the hourly wage at $25.00. The government has instituted a legal minimum price of $2.30 per gallon for milk.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

question 2 macroeconics

2. The language of price controls
Consider the market for milk. Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon,
and employees at grocery stores eam $21.50 per hour.
Complece the following table by indicating whecher each of the statements is an example of a price ceiling or a price floor and whecher it results in a
shortage or a surplus or has no effect on the price and quantity that prevail in the market.
Price Control
Effect
Statement
The government prohibits grocery stores from selling milk for more than $2.30 per
gallon.
There are many teenagers who would like to work at grocery stores, but the minimum-
wage law sets the hourly wage at $25.00.
The government has instituted a legal minimum price of $2.30 per gallon for milk.

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