Discuss the type of price control that a government would implement if it wishes to impose a national minimum wage. Include in your answer the economic effects of such a price control. Motivate your answer with the aid of a diagram.

Question Price controls are set on infant formula. Calculate the shortage caused by the price ceiling. Price PE = $40 Pc = 515 Market for Infant Formula Q5 = 100 QE= 700 QD=1300 Price Ceiling D Quantity (thousands of cans)

If the government sets a price ceiling in the market for fuel oil that falls below the equilibrium price , it will   Question 14 options:   lead to the quantity demanded of fuel oil exceeding the quantity supplied.   lead to the quantity supplied of fuel oil exceeding the quantity demanded.   decrease the demand for fuel oil.   increase the supply of fuel oil.   have no effect in the market for fuel oil.

Rent Ceilings in New York City New York City rent controls began after World War II, when greater demand for rental housing threatened to push rents higher. To keep prices from rising to their equilibrium level, city officials imposed rent ceilings. Since the quantity demanded at the ceiling price exceeded the quantity supplied, a housing shortage resulted, as was sketched out in panel (b) of Exhibit 11. Thus, the perverse response to a tight housing market was a policy that reduced the supply of housing over time. Prior to rent controls, builders in New York City completed about 30,000 housing units a year and 90,000 units in the peak year. After rent controls, new construction dropped sharply. To stimulate supply, the city periodically promised rent-ceiling exemptions for new construction. But three times the city broke that promise after the housing was built. So builders remain understandably wary. During the peak year of the last decade only about 10,000 new housing units were…