Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 7, Problem 2MCQ
To determine
To select:
The option that correctly identifies the effect of a
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What will a price ceiling always create?
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surplus
a clear market
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$4
$2
$1
0
A
B
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Market for Good X
What is the condition in the market for good X with an
effective price ceiling at $2?
D
Supply
X
Demand
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Quantity
There is a surplus of 50 units.
There is a surplus of 100 units.
There is a shortage of 50 units.
There is a shortage of 100 units.
Chapter 7 Solutions
Foundations of Economics (8th Edition)
Ch. 7 - Prob. 1SPPACh. 7 - Prob. 2SPPACh. 7 - Prob. 3SPPACh. 7 - Prob. 4SPPACh. 7 - Prob. 5SPPACh. 7 - Prob. 6SPPACh. 7 - Prob. 7SPPACh. 7 - Prob. 8SPPACh. 7 - Prob. 9SPPACh. 7 - Prob. 10SPPA
Ch. 7 - Prob. 11SPPACh. 7 - Prob. 1IAPACh. 7 - Prob. 2IAPACh. 7 - Prob. 3IAPACh. 7 - Prob. 4IAPACh. 7 - Prob. 5IAPACh. 7 - Prob. 6IAPACh. 7 - Prob. 7IAPACh. 7 - Prob. 8IAPACh. 7 - Prob. 9IAPACh. 7 - Prob. 1MCQCh. 7 - Prob. 2MCQCh. 7 - Prob. 3MCQCh. 7 - Prob. 4MCQCh. 7 - Prob. 5MCQCh. 7 - Prob. 6MCQCh. 7 - Prob. 7MCQCh. 7 - Prob. 8MCQ
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- A low-income county decides to set a price ceiling on bread so it can make sure that bread is affordable to the poor. Table 3.11 provides the conditions of demand and supply. What are the equilibrium price and equilibrium quantity before the price ceiling? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at 2.40? At 2.00? At 3.50?arrow_forwardUse 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?arrow_forwarda. Price ceilings create shortages if they are set b. Which of the following are price ceilings? the minimum wage price controls on prescription drugs an agricultural price support rent control below the equilibrium price.arrow_forward
- If the supply decreases and the demand decreases, a. b. C. d. the equilibrium price and quantity both decreases. the equilibrium price decreases while the equilibrium quantity increases. the equilibrium quantity decreases while the effect on price is ambiguous. the equilibrium price and quantity both increases. A a B b D darrow_forwardDescribe in your words : Shortage and Surplus Price Floor and Price Ceilingarrow_forwardIf a legal ceiling price is set above the equilibrium price, • a shortage of the product will occur. a surplus of the product will occur. a black market will evolve. neither the equilibrium price nor the equilibrium quantity will be affected.arrow_forward
- If a municipality sets a price ceiling below equilibrium for apartments in New York City, Select one: a. the price ceiling will create a surplus of apartments b. the price ceiling will create a shortage of apartments c. the price ceiling will not affect the market for apartments d. the market for more broadway plays will increase Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardEmpirical evidence suggests that increases in the minimum wage do not result in reductions in employment among workers aged 25-54, but cause reduced employment for teenagers. This would suggest: A. the minimum wage is lower than the market-clearing wage for workers aged 25-54 B. the higher minimum wage causes a shift in supply for older age groups C. the minimum wage is lower than the market-clearing wage for teenagersarrow_forwardIf 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 shortagearrow_forward
- Please have a lookarrow_forwardThe demand and supply schedule for a product is shown below. The government sets a maximum price of $4 per unit. What will be the shortage of the product after four weeks? Pick a, b, c, or d a. 1,100 b. 2,500 c. 4,400 d. 0arrow_forwardQº The demand for pizza is represented by PD = 10 and the supply of pizza is represented by PS = 4 dollars. The market for pizza is perfectly competitive. Suppose a price ceiling was set $2 below the equilibrium price. What would be the result? There would be a surplus of 12000. There would be a shortage of 12000. This is a nonbinding price ceiling. Quantity demanded would equal 4000. + NO 2 with Q in thousands and Pinarrow_forward
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