What are price ceilings and price floors, Microeconomics

1. Explain what are price ceilings and price floors and how they effect the market for a good or service. Also show through graphs, if they cause any inefficiencies in a perfectly competitive market.

2. Before the first Gulf War, Kuwait had the capacity to produce a certain amount of oil from its oil wells. After the war, it found that capacity greatly diminished because the oil wells were on fire. Draw Kuwait's PPF before and after the war, assuming that the only two goods produced are oil and food. Further assume that setting the oil wells on fire did not affect Kuwait's ability to produce food. Explain why the PPF before the war is different from the PPF after the war. If instead, Kuwait had faced economic growth how would it reflect on the PPF?

 

Posted Date: 4/5/2013 6:03:25 AM | Location : United States







Related Discussions:- What are price ceilings and price floors, Assignment Help, Ask Question on What are price ceilings and price floors, Get Answer, Expert's Help, What are price ceilings and price floors Discussions

Write discussion on What are price ceilings and price floors
Your posts are moderated
Related Questions
GIVE AND EXPLAIN IN DETAIL,ARGUMENTS GIVEN TO EXPLAIN LEONTIEF''S EMPERICAL FINDINGS ON THE HECKSCHER-OHLIN MODEL OF TRADE.

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

WITH reference to incidence taxation,explain with the help diagrams,who bears the incidence of taxation when the demand for a commodity is perfectly inelastic, perfectly elastic an

Perfect competition and monopoly are rarely found in the real world and thus they do not represent, for the most part, the actual market situations. Therefore, the conclusions whic

Short run production period and long run production period: The short run is a period of production during which some factors of production are fixed and some too are variable

What currency was used in the 1700s? Ans) this is depends on the country. Most currencies, though, were based on gold and silver. In America, in the 13 colonies, tobacco wa

What are the economic implications of income inequality? How can economic theory be helpful to analyze the causes and impact of income inequality? What are the concerns and how the

what is non- collusioligopoly and how its price and output is determined

Comparison of sameulson revealed preference theory with the Hicksian revealed preference theoru

In November 2010, every Mzumbe University student had an income of 150000/= per month,facing the price of meal (X) 1000/= and average price of other goods (Y) 1000/=.The initial ut