Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Chapter 3, Problem 11SCQ
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Chapter 3 Solutions
Principles of Economics 2e
Ch. 3 - Review Figure 3.4. Suppose the price of gasoline...Ch. 3 - Why do economists use the ceteris paribus...Ch. 3 - In an analysis of the market for paint, an...Ch. 3 - Many changes are affecting the market for oil....Ch. 3 - Lets think about the market for air travel. From...Ch. 3 - A tariff is a tax on imported goods. Suppose the...Ch. 3 - What is the effect of a price ceiling on the...Ch. 3 - Does a price ceiling change the equilibrium price?Ch. 3 - What would be the impact of imposing a price flour...Ch. 3 - Does a price ceiling increase the decrease the...
Ch. 3 - If a price floor benefits producers, why does a...Ch. 3 - What determines the level of prices in a market?Ch. 3 - What does a downward-sloping demand curve mean...Ch. 3 - Will demand curves have the same exact shape in...Ch. 3 - Will supply curves have the same shape in all...Ch. 3 - What is the relationship between quantity Demanded...Ch. 3 - How can you locate the equilibrium point on a...Ch. 3 - If the price is above line equilibrium level,...Ch. 3 - When the price is above the equilibrium, explain...Ch. 3 - What is the difference between the demand and the...Ch. 3 - What is the difference between the supply and the...Ch. 3 - When analyzing a market, how do economists deal...Ch. 3 - Name some factors that can cause a shift in line...Ch. 3 - Name some farm that can cause a shift in the...Ch. 3 - How does one analyze a market where both demand...Ch. 3 - What causes a movement along the demand curve?...Ch. 3 - Does a price ceiling attempt to make a price...Ch. 3 - How does a price ceiling set below the equilibrium...Ch. 3 - Does a price floor attempt to make a price higher...Ch. 3 - How does a price floor 521 above the equilibrium...Ch. 3 - What is consumer surplus? How is it illustrated on...Ch. 3 - What is producer surplus? How is it illustrated on...Ch. 3 - What is total surplus? How is it illustrated on a...Ch. 3 - What is the relationship between total surplus and...Ch. 3 - What is deadweight loss?Ch. 3 - Review Figure 3.4. Suppose the government decided...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Consider the demand for hamburgers. If the price...Ch. 3 - How do you suppose the demographics of an aging...Ch. 3 - We know that a change in the price of a product...Ch. 3 - Suppose there is a soda tax to curb obesity. What...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Suppose both of these events took place at the...Ch. 3 - Must government policy decisions have winners and...Ch. 3 - Agricultural price supports result in governments...Ch. 3 - Can you propose a policy that meld induce the...Ch. 3 - What term would an economist use to describe what...Ch. 3 - Explain why voluntary Martians improve social...Ch. 3 - Why would a free market mar operate at a quantity...Ch. 3 - Review Figure 3.4 again. Suppose the price of...Ch. 3 - Table 3.8 shows information on the demand and...Ch. 3 - The computer market in recent years has seen many...Ch. 3 - Table 3.9 illustrates the markets demand and...Ch. 3 - Table 3.10 shows the supply and demand for movie...Ch. 3 - A low-income county decides to set a price ceiling...
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- 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.arrow_forwardWhat is the difference between a price ceiling and a price floor? If a price ceiling for a good is set below the market equilibrium, what will happen to the quality and future avail- ability of the good? Explain.arrow_forwardThe below graph shows a market where the government has imposed a price floor. For each of the following three questions, select the area(s) described after the floor is in place. A Price Floor Supply D C Price ($) F Demand H Quantity What is the consumer surplus? A What is the producer surplus? C+F What is the deadweight loss of the price floor? E+F varrow_forward
- How does an effective price ceiling affect the quantity demanded and the quantity supplied in a competitive market? Provide an example.arrow_forwardUse the following figure to answer the question: What is the consumer surplus in this market when there is a price floor created at the "price above equilibrium" line? Price A B C D E F Supply Price above equilibrium Demand Quantity A+B (area above equilbrium price and below demand, up to the quantity with the restriction) O (area below demand and above the price above the equilbrium line) O A+B+E (area under the demand above the equilbrium price) O A+B+C (area under the demand over to the quantity resulting from regulation)arrow_forwardA market is described by the following supply and demand curves: QS = 3P QD = 400−P The equilibrium price is $ and the equilibrium quantity is . Suppose the government imposes a price ceiling of $120. 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 $120 will result in . Suppose the government imposes a price floor of $120. 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 $120 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:arrow_forward
- Explain why a shortage occurs in a market where binding price ceiling exist. Does a price ceiling improve the operation of the market?arrow_forwardHere is the Gadget market: Quantity Demanded = 100 - P Quantity Supplied = 9P What is consumer surplus in this market?arrow_forwardThe figure illustrates the market for apples in which the government has imposed a price floor of $12 per crate. How many crates of apples will be sold after the price floor has been imposed? million crates of apples per year. (Enter your response as an integer.) Will there be a shortage or surplus? If there is a shortage or surplus, how large will it be? million crates of apples There will be a of per year. (Enter your response as an integer.) Will apple producers benefit from the price floor? O A. Apple producers who are able to sell their apples at the $12 price per crate will benefit. B. Apple producers who are not able to sell their apples will not benefit. OC. Total revenue for apple producers as a group will decrease from $220 million to $216 million. D. Both a and b. E. All of the above. Price 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- 0 4 Supply Demand 8 12 16 20 24 28 32 36 Quantity (millions of crates per year) 40arrow_forward
- In the market for cotton, the quantity demanded, and quantity supplied are expressed mathematically as QD = 700 - 100P and QS = 150P - 300, where P is the price per pound of cotton and Q measures pounds of cotton. Suppose the government sets a price ceiling of $2.50 per pound of cotton. How big is the shortage resulting from the price ceiling? What is the level of consumer surplus with the price ceiling? What is the value of the deadweight loss associated with the price ceiling?arrow_forwardThe below graph shows a market where the government has imposed a price ceiling. For each of the following three questions, select the area(s) described after the ceiling is in place. Demand Supply B D Price ($) F H. Price Ceiling J M Quantity Which of the following is the consumer surplus? A+B+C v Which of the following is the producer surplus? What is the deadweight loss of the price ceiling? C+Farrow_forwardWhat is price legislation? Explain the condition under which price legislation is employed in an economy.arrow_forward
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