ECON 20A Study Guide - Midterm Guide: Price Ceiling, Price Floor, Demand Curve

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12 Oct 2018
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Second midterm study questions: price controls are usually enacted as a means of raising revenue for public purposes. when policymakers detect inefficiencies in a market. Prices have the crucial job of balancing supply and demand. Prices send signals to buyers and sellers to help them make rational economic. Quantity is binding. causes a shortage. causes the quantity demanded to exceed the quantity supplied. All of the above are correct: refer to figure 6-2. The price ceiling causes a shortage of 45 units of the good. is not binding because it is set below the equilibrium price. Both a) and b) are correct. makes it necessary for sellers to ration the good: refer to figure 6-2. The price ceiling causes a surplus of 40 units. surplus of 85 units. shortage of 45 units. shortage of 85 units: refer to figure 6-2. Sellers of airline tickets are required to pay the tax to the government.

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