ECON 101 Lecture : chapter 4,5,6,7 All of these chapters discussed in the lectures are summarised into a very concise lecture which is easy to understand and go over.

50 views8 pages

carminehamster334

16 Oct 2011

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

hussam.sw and 39351 others unlocked

ECON 101 Full Course Notes

Verified Note

78 documents

Document Summary

At the maximum price pm (refer to notes), the quantity demanded (qd) exceeds the quantity supplied (qs) Result: excess demand (shortage) Rental market (refer to notes) Setting a maximum price legislation creates a shortage. Thus government will create low- income housing. Effects of a maximum price and the black market. Black market simply means that a commodity will be sold at an illegal price (since there is excess demand/shortage) Total revenue (when total output qs is with black market price pb) Tr = p x q = pb x qs (o pb b qs) Firms (producers: tr = pm x qm (o pm m qm) Black market: tr =( pb x qm)- (pm x qm); (o pb b qm) (o pm m qm) Sometimes to make units available, you have to bribe them. Applications of market demand and supply (chapter 5, 6 + 7) Minimum price legislation (refer to notes)

Related Questions

54) Suppose the government imposes a maximum price (price ceiling) equal to $15. A) This will lead to excess supply in the market equal to 25 units. B) This will lead to excess supply in the market equal to 10 units. C) This will have no affect on the market. D) This will lead to excess demand in the market equal to 10 units. E) This will lead to excess demand in the market equal to 25 units.

Consumer surplus is equal to the difference between:

A) The maximum price a buyer is willing to pay and the market price.

B) The minimum price a buyer is willing to pay and the market price.

C) The maximum price a seller is willing to accept and the market price.

D) The minimum price a seller is willing to accept and the market price.