Principles of Macroeconomics, Loose-Leaf Version
8th Edition
ISBN: 9781337096881
Author: Mankiw, N. Gregory
Publisher: South-Western College Pub
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Question
Chapter 6.1, Problem 1QQ
To determine
The price ceiling , price floor , and impact on economic surplus and shortage.
Expert Solution & Answer
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Students have asked these similar questions
Describe in your words :
Shortage and Surplus
Price Floor and Price Ceiling
Use the table below to answer the questions:
Price
Quantity Supplied
Quantity Demanded
$5
25
150
$10
50
100
$15
75
75
$20
100
50
$25
115
25
$30
130
10
Find the equilibrium price and quantity.
Assume a $20 price floor is imposed in this market.
Find the quantity demanded.
Find the quantity supplied.
Will this be a surplus or shortage?
How big will the surplus or shortage be?
How many units will be sold in the market?
Will this price floor increase, decrease, or have no effect on consumer surplus?
Will this price floor increase, decrease, or have no effect on total surplus?
Will this price floor increase, decrease, or have no effect on deadweight loss?
If the government imposes a price ceiling at $14, and the equilibrium price is at $10 in
this market, the result would be
a. A shortage
b. A surplus
c. A new equilibrium price
d. Neither a surplus or a shortage
Chapter 6 Solutions
Principles of Macroeconomics, Loose-Leaf Version
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Similar questions
- The following table summarizes information about the market for principles of economics textbooks: Price Quantity Demanded per Year Quantity Supplied per Year $45 4,300 300 55 2,300 700 65 1,300 1,300 75 800 2,100 85 650 3,100 What is the market equilibrium price and quantity of textbooks? To quell outrage over tuition increases, the college places a $55 limit on the price of textbooks. How many textbooks will be sold now? While the price limit is still in effect, automated publishing increases the efficiency of textbook production. Show graphically the likely effect of this innovation on the market price and quantity.arrow_forwardThe computer market in recent years has seen many more computing sell at much lower prices. What shift in demand or supply is most likely to explain this outcome? Sketch a demand and supply diagram and explain your reasoning for each. A rise in demand A fall in demand A rise in supply A fall in supplyarrow_forwardThe following table summarizes information about the market for principles of economics textbooks: What is the market equilibrium price and quantity of textbooks? To quell outrage over tuition increases, the college places a $55 limit on the price of textbooks. How many textbooks will be sold now? While the price limit is still in effect, automated publishing increases the efficiency of textbook production. Show graphically the likely effect of this innovation on the market price and quantity.arrow_forward
- A price ceiling will have the largest effect: substantially below the equilibrium price slightly below the equilibrium price substantially above the equilibrium price slightly above the equilibrium price Sketch all four of these possibilities on a demand and supply diagram to illustrate your answer.arrow_forwardSelect the correct answer. A price ceiling will usually shift: demand supply both neitherarrow_forwardLets think about the market for air travel. From August 2014 to January 2015, the price of jet fuel increased roughly 47. Using the four-step analysis, how do you think this fuel price increase affected the equilibrium price and quantity of air navel?arrow_forward
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