Problem 1
Use each of the two terms below in a sentence that illustrates the meaning of the term: a. competitive pricing b. incentive
Problem 1
Explain the differences between the terms in each of these pairs: a. market equilibrium disequilibrium b. surplus shortage
Problem 2
What is the difference between a price floor and a price ceiling?
Problem 2
How are surplus and shortage related to equilibrium price?
Problem 3
Why is equilibrium price represented by the intersection of the supply and demand curves in a particular market?
Problem 4
Why do changes in demand or supply cause disequilibrium?
Problem 4
How does the existence of the black market work against the intended purpose of rationing?
Problem 4
How do prices serve as signals and incentives to producers to enter a particular market? to leave a certain market?
Problem 5
Why is the market always moving toward equilibrium?
Problem 5
Aside from turning to the black market, how do consumers make up for goods that are rationed?
