Monday, March 17, 2014

March 17

Equilibrium Notes: If you missed class take notes on Chapter 6 Section 1

Questions:


1.     What is unique about an equilibrium price?
2.     What situation can lead to excess demand?
3.     What situation can lead to excess supply?
4.     How is a price floor different from a price ceiling? Give examples of each.
5.     How does rent control work?
6.     What are the benefits and drawbacks of a price ceiling?
7.     According to figure 6.2 on page 127, why are sales lower at $1.00 a slice than at $2.00 a slice?
8.     What are the benefits and drawbacks of a price floor?
9.     Turn to the graph of median weekly earnings on page 536 in the Databank.  Suppose that the federal government has raised the minimum wage to $600 per week.  (a) Which category of jobs would be least affected by the change? (b) Which two categories would be most affected by the new minimum wage? (c) What are the likely consequences for workers in these two fields?

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