b. Prices in most market are free to rise or fall to their equilibrium levels, no matter how high or low those levels might be. However, government sometimes concludes that supply and demand will produce prices that are unfairly high for buyers or unfairly low for sellers. So, government may place legal limits on how high or low a price or prices may go. With the rapidly rising of the crude oil price, it caused to increase in gasoline price and lead to increase the equilibrium price in the market. This rapidly rising price of gasoline greatly burdens low- and middle-income household. Analyse how government policy can adjust on this situation to keep gasoline remain affordable for these household.

b. Prices in most market are free to rise or fall to their equilibrium levels, no matter how high or low those levels might be. However, government sometimes concludes that supply and demand will produce prices that are unfairly high for buyers or unfairly low for sellers. So, government may place legal limits on how high or low a price or prices may go. With the rapidly rising of the crude oil price, it caused to increase in gasoline price and lead to increase the equilibrium price in the market. This rapidly rising price of gasoline greatly burdens low- and middle-income household. Analyse how government policy can adjust on this situation to keep gasoline remain affordable for these household.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

How does an effective price ceiling affect the quantity demanded and the quantity supplied in a competitive market? Provide an example.
9
Am. 115.
The figure below represents the market for Gasoline, where initially the equilibrium price was $5.60. The picture shows the effect of a $1.50 tax on gasoline. Using the information from the figure, what is the price elasticity of demand(Using the Midpoint method) when moving from equilibrium to the new demand after the tax?(Input the answer in absolute value and round it to 2 decimal places)
Fill in the Blanks Type your answers in all of the blanks and submit Consider the market for oranges. Suppose the demand curve is given by Q = 40 - 2P and the supply curve is given by Q = 2P. (It will help to draw things out.) The demand curve will intersect the x-axis at Q = 20 and it will intersect the y-axis at P = 40 The equilibrium price will be 20 and the equilibrium quantity will be 10 The consumer surplus will be 100 and the producer surplus will be 100
What would happen to the equilibrium price and equilibrium quantity of a good after the government subsidized its production at the same time that demand increased? Explain.
How would each event affect the market for COVID-19 vaccines? Does the event cause a change in demand or a change in the quantity demanded? Is the change positive or negative? Or does the event cause a change in supply or a change in the quantity supplied? Is the change positive or negative? Explain the mechanism for the change and what happens to equilibrium price and quantity. a) The vaccine is approved for children under the age of 12. b) The U.S. government provides a subsidy that allows the price of the vaccine to be $0 for everyone. c) Several vaccines pass Phase 3 (large-scale efficacy tests) and are approved by the FDA for full use. d) A truck carrying the Pfizer vaccine has a malfunction and the refrigeration requirements aren’t met, so all the doses go bad. e) School districts and health care facilities add a requirement for getting the vaccine for all employees.
四※ 品6 会 00 * P. S per gallon After Hurricane Katrina damaged many U.S. gasoline refineries in 2005, the price of gasoline shot up around the country. The Federal Trade Commission announced that it would investigate price gouging-charging "too much"-and several members of Congress called for price controls on gasoline. Had they been imposed, what effect would price controls have had? Who would have benefited, and who would have been harmed by the controls? Use a supply-and-demand diagram to illustrate your answers. s2 Price controls on gasoline would have A. resulted in a shortage because demand would have exceeded supply. O B. benefited all consumers because gas prices would have been lower. P1 .........e, O C. benefited all consumers because there would have been no surpluses. O D. resulted in a market equilibrium because gas would have been affordable. O E. resulted in a shortage because refiners would have shut down their plants in protest. Consider the market for gasoline…
In 2014, oil facilities in Iraq were attacked and strong economies in the United States and China boosted the demand for oil. a. Demonstrate graphically how these events led to increases in oil prices in June 2004. What was the effect on the equilibrium quantity of oil bought and sold? b. As a result of political pressure, OPEC agreed to increase the daily quota by 2 million barrels a day. What was the likely effect on equilibrium oil price and quantity? Demonstrate your answer graphically.
Suppose demand is D and supply is S0. If a price ceiling of $6 is imposed, what are the resulting shortage and full economic price?Shortage: Full economic price:
12 . Problems and Applications Q10 A market is described by the following supply and demand curves: QSQS = = 3P3P QDQD = = 400−P400−P The equilibrium price is and the equilibrium quantity is . Suppose the government imposes a price ceiling of $80. This price ceiling is , and the market price will be . The quantity supplied will be , and the quantity demanded will be . Therefore, a price ceiling of $80 will result in . Suppose the government imposes a price floor of $80. This price floor is , and the market price will be . The quantity supplied will be and the quantity demanded will be . Therefore, a price floor of $80 will result in . Instead of a price control, the government levies a tax on producers of $40. As a result, the new supply curve is: QSQS = = 3(P−40)3P−40 With this tax, the market price will be , the quantity supplied will be , and the quantity demanded will be . The passage…
When there is no intervention, the equilibrium quantity of labor is 4 and the equilibrium wage is $12. Suppose the government decides to impose a price floor in this labor market, as it thinks that a wage of $12 is too low. With the price floor, wages go up to $16, and because of that quantity supplied of labor increases to 5, whereas quantity demanded drops to 2.4. Match the right with the left side correctly: Wages Supply A $16 Price Floor $12 E D Demand 2.4 4 5 Quantity of Labor Consumer surplus before price floor [ Choose ] Producer surplus before price floor [ Choose ] > > B.