Microeconomics Chapter 4 Section 3 (Lesson 6)

Black markets may arise A. in reaction to binding price ceilings. B. in reaction to​ non-binding price floors. C. in reaction to excessive producer surplus. D. in reaction to insufficient consumer surplus. E. both a and b.

A. in reaction to binding price ceilings.

Can economic analysis provide a final answer to the question of whether the government should intervene in markets by imposing price ceilings and price​ floors? Why or why​ not? A. Economic analysis can provide such an answer because it seeks to address positive questions such as​ "what is." B. Economic analysis can provide such an answer because it seeks to address both positive and normative questions such as​ "what is" and​ "what ought to​ be." C. Economic analysis cannot provide such an answer because it seeks to address positive questions such as​ "what is." D. Economic analysis cannot provide such an answer because it seeks to address normative questions such as​ "what ought to​ be." E. Economic analysis can provide such an answer because it seeks to address normative questions such as​ "what ought to​ be."

C. Economic analysis cannot provide such an answer because it seeks to address positive questions such as​ "what is."

A black market is: A. a market in which there is no dead weight loss. B. a market in which there are​ non-binding price controls. C. a market in which buying and selling occur at legal prices. D. a market in which buying and selling occur at prices that violate government price regulations. E. a market in which participants exchange goods and services without using money.

D. a market in which buying and selling occur at prices that violate government price regulations.

Do producers tend to favor price floors or price​ ceilings? ​ Why? Producers favor: A. price floors​ because, when​ binding, price floors increase price above the equilibrium and decrease dead weight loss. B. price floors​ because, when​ non-binding, price floors increase price above the equilibrium and may increase producer surplus. C. price ceilings​ because, when​ binding, price ceilings increase price above the equilibrium and may increase producer surplus. D. price floors​ because, when​ binding, price floors increase price above the equilibrium and may increase producer surplus. E. price floors​ because, when​ binding, price floors decrease price below the equilibrium and increase producer surplus.

D. price floors​ because, when​ binding, price floors increase price above the equilibrium and may increase producer surplus.