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Aplia for Gwartney/Stroup/Sobel/Macpherson's Microeconomics: Private and Public Choice, 16th Edition, [Instant Access], 1 term (6 months)
16th Edition
ISBN: 9781305648210
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel; David A. Macpherson
Publisher: Cengage Archive
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Chapter 4, Problem 7CQ
To determine
Black markets.
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Aplia for Gwartney/Stroup/Sobel/Macpherson's Microeconomics: Private and Public Choice, 16th Edition, [Instant Access], 1 term (6 months)
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- What polices would lead to unintended consequences like black markets? Explain Explain in detail.arrow_forwardWhen compared to the results in competitive markets, monopoly markets can be expected to have restricted output and lower prices have restricted output and higher prices have higher prices and equivalent output have lower prices and equivalent outputarrow_forwardA “black market” is a place where people make illegal trades in goods and services. For instance, during the Soviet era, it was common for American tourists to take a few extra pairs of Levi’s jeans when visiting the Soviet Union: They would sell the extra pairs at high prices on the illegal black market. Consider the following claim: “Price-controlled markets tend to create black markets.” Let’s illustrate with the following figure. If there is a price ceiling in the market for cancer medication of $50 per pill, what is the widest price range within which you can definitely find both a buyer and a seller who would be willing to illegally exchange a pill for money? (There is only one correct answer.)arrow_forward
- The minimum wage law may distort the market for non-skilled labor. To reduce the distortion, some economists suggest a two-tier minimum wage system, where employees over age 19 have a minimum wage and employees under age 20 could earn wages below that figure. Give two reasons why economists think the minimum wage affects the under-20 labor market more than othersarrow_forwardWhat are the possible reasons why the government may make a market intervention? What are the possible implications of such interventions? How might the wedge between consumers and firms lead to market distortions?arrow_forwardWhat is a minimum wage? Explain why it may fail to help the poor households in an economy.arrow_forward
- Using a supply-demand diagram, show a labor market with a binding minimum wage. Now, use the diagram to show those who are helped by the minimum wage, and those who are hurt by the minimum wagearrow_forwardWhat is rent control?arrow_forwardIs there a better alternative to imposing a price ceiling?arrow_forward
- Explanation it correctlyarrow_forwardThe government often meddles in markets, using price ceilings and price floors and taxes which move the market away from free market equilibrium. Should the government meddle in markets? When should it meddle? Should there be rent controls or other price ceilings? Should the government set a minimum wage be $15? Should the government control the price of life saving medicine, such as insulin? Should they set a price ceiling? Or use taxes? How does elasticity of demand affect who will pay the tax? What are some reasons that the government should meddle in markets using price controls and taxes?arrow_forwardDon't use Ai and chatgpt. Answer in step by step with explanation.arrow_forward
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