Log in
Economics
12
answers
0
watching
476
views
3 May 2018

25. Assume that the market clearing price for a shirt is $20, but that the maximum price that can be charged is $15. This is an example of a. a price control that will lead to a surplus of shirts on the market. b. a price floor that will lead to a shortage of shirts on the market. c. a price ceiling that will lead to a shortage of shirts on the market. d. markets failing to ration a fixed quantity of a good. e. none of the above.

word_media_image1.png
Watch
12
answers
0
watching
476
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share
Already have an account? Log in
Share
Already have an account? Log in
Share
Already have an account? Log in
Share
Already have an account? Log in
Share
Already have an account? Log in
Share
Already have an account? Log in
Share
Already have an account? Log in
Share
Already have an account? Log in
Share
Already have an account? Log in
Share
Already have an account? Log in
Share
Hubert Koch
Hubert KochLv2
3 May 2018
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Market equilibrium and disequilibrium

The following graph shows the monthly demand and supply curves in the market for shirts.

Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.

The equilibrium price in this market is ........ per shirt, and the equilibrium quantity is........ shirts bought and sold per month.

Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward pressure on prices.

            Price              Shortage or Surplus        Shortage or Surplus Amount       Downward/Upward 

     (Dollars per shirt)                                                    (Shirts)       

          40                        ...........                               ..........                                 ............

          60                        ...........                               ..........                                 ............

 

 

The demand for a product is Q = 800 - 5P and supply is Q = 100 + 2P. The market-clearing prics is $___ and the market-clearing quantity is ____ units. (Enter your responses as whole​ numbers.)

Consumers complain that this price amounts to price gouging and successfully lobby the government to set a price ceiling of​ $60 for the product. As a result, consumers will want to consume _____ units while producers will want to sell only _____. (Enter your responses as whole numbers)

As a result of the price ceiling, there will be a ________(shortage or surplus) of _____ units.

1.) An excise tax on a good typically reduces the net price received by the seller. (TRUE/FALSE)

2.) The burden of an excise tax on gasoline falls entirely on consumers of gasoline. (TRUE/FALSE)

3.) Rent controls are one of the few examples of a price floor in market economies. (TRUE/FALSE)

4.) Imposing a price ceiling below the equilibrium price of a good often leads to_____.

A) A greater supply of the good

B) A black market for the good

C) A rightward shift of the supply curve for the good.

D) A leftward shift of the demand curve for the good.

E) All of these

5.) Which of the following is true of price floors and ceilings?

A) Lead to the same price and quantity as in competitive market.

B) Lead to technical efficiency

C) Cause the demand curve to shift left

D) Usually result from government intervention

E) Cause the supply curve to shift right.

6.) Price ceilings often lead to black markets. (TRUE/FALSE)

7.) When minimum wage is above the equilibrium wage what occurs?

A) There will be a shortage of labor

B) There will be no effect on the number of people employed

C) There will be an increase in unemployment rate

D) There will be a decrease in unemployment rate

8.) An excise tax on a good typically reduces the price paid by the consumer (TRUE/FALSE)

9.) If a price ceiling is below the equilibrium price is imposed on a market, it will cause the quantity demanded to rise and the quantity supplied to fall. (TRUE/FALSE)

10.) Price floors often lead to black markets. (TRUE/FALSE)

11.) If an excise tax is imposed on restaurant meals what occurs?

A) Fewer meals will be produced and sold

B) More meals will be produced and sold

C) Market price of the meals will fall

D) Government tax revenue will fall.

Related Documents

ECO 201 Chapter Notes - Chapter 6: Price Ceiling, Price Floor, Economic Equilibrium
chocolatereindeer76
ECO 1104 Lecture Notes - Lecture 6: Demand Curve, Economic Equilibrium, Price Floor
orangeturtle698
ECO 1104 Lecture Notes - Lecture 6: Demand Curve, Price Ceiling, Price Floor
salmonsalmon41

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in