Applications of Supply and Demand Study Plan

Refer to the figure below. If the government set a price floor of $30, there would be

zero excess supply.

If the total or social surplus in a market is $500, and there is no government intervention, but the producer surplus is $200, consumer surplus is ________. Responses

$300

________ are generally the result of price ceilings.

Shortages

A government decides to set a price ceiling on eggs so that eggs are affordable to the poor. The conditions of demand and supply are given in the table below. What will the excess supply or the shortage be if the price ceiling is set at $2.00?

3,000 shortage.

Refer to the figure below. If the government set a price ceiling of $80, the amount bought and sold will be:

20

Which of the following represents producer surplus?

B

What effect over the last decade, has the increasingly efficient and inexpensive technology of online college courses had on the college textbook market? Responses

The demand for physical textbooks have steadily decreased, and as a result more publishing companies are having less demand for high skilled textbook editor jobs.

An increase in consumer surplus is caused by

a price ceiling.

What is a the typical result of a price floor?

excess supply.

The country of Zanabar produces computers and produces them in a large quantity while the country of Abathana expertly produces cell phones in large quantities. In order for both countries to consume more desirable combinations of goods and services (computers and cell phones) they should

freely trade computers and cell phones to improve allocative efficiency.

As the information technology advances and consumers buy products requiring more and more technology, the wages of people with high level programming and other technical skills would

increase as the demand for high tech skills increases.

Consumer surplus is best described as the extra benefit consumers receive when they ________.

pay less than they would have been willing to pay