Price Ceiling and Price Floor
Introduction:
Price ceiling is the law that sets a maximum price below the equilibrium market price, but a price floor is the law that sets a maximum price above the market equilibrium price.
Problem Statement 1:
Using the data provided in the accompanying table, fill in the last column and then provide answers to the following:
|
Price
|
Quantity Demanded
|
Quantity Supplied
|
Surplus (+) or Shortage (-)
|
|
$12
|
7
|
9
|
|
|
$11
|
8
|
8
|
|
|
$10
|
9
|
7
|
|
|
$9
|
10
|
6
|
|
|
$8
|
11
|
5
|
|
|
$7
|
12
|
4
|
|
- Identify whether the number is a surplus, shortage, or neither.
- What is the efficient quantity?
- What price results in the efficient quantity? Using the data from the table, draw graphs of a demand and supply curve and indicate the point of equilibrium with the help of the Grapher tool. Press the Alt+PrintScrn keys simultaneously. Open a Microsoft Word document and insert the image by pressing the Ctrl+V.
- Suppose a price ceiling of $8 is established. Does a surplus or shortage result? What is the amount of surplus or shortage?
- Suppose a price ceiling of $12 is established. What is its effect?
- Suppose a price floor of $12 is established. Explain its effect.
Deliverables Criteria:
Submit answers in a minimum of 100 words in a Microsoft Word document.
Problem Statement 2:
Deficits and Debt
Introduction:
Debt is a four-letter word that has put many nations into trouble. There is a cause for both personal and national debt.
Write a brief essay on Question 2 from the "Thinking Critically" section on "Deficits and Debt-Do We Spend Too Much?" on page 367 of the textbook.
Research the current size of the national debt as part of your answer.
Refer to the Congressional Budget Office Web site:
http://www.cbo.gov/
Deliverables and Format:
Submit answers in not more than 300 words in a Microsoft Word document. Be sure to cite your sources using APA style.Font: Arial; 12
Line Spacing: Double