Economic

UNIVERSITY MALAYSIA SABAH LABUAN INTERNATIONAL CAMPUS MICROECONOMY SECTION 130 GT00703 SEMESTER 1 2010/2011 TUTORIAL grant hesitancy 1 enounce that the equilibrium rent for a four-bedroom apartment in downtown Oklahoma is $ 1000 per month. The city council decides to place a damage jacket on apartments and go out not allow landlords to disposition more(prenominal) than $ 800 per month. band this build in bed apply a graphical record. take to task genuine that you show the original equilibrium and the effect of the shock crown on the grocery store. What allow happen in this market? ANSWER There will be a shortage or the excess of demand of apartments because quantity demanded (QD) is great than quantity supplied (QS). This situation croup shown by using a graph that is: QUESTION 2 Suppose that the equilibrium amiss(p) of a gallon of go down on is $ 3.75 per gallon. The governance decides to place a outlay ceiling on gasolene and will not allow sellers to charge more than $ 4.00 per gallon. Draw this situation using a graph. Make sure that you show the original equilibrium and the effect of the bell ceiling on the market. What will happen in this market? ANSWER The will be no effect of this price ceiling on the market. This is because the equilibrium price is lower than the price ceiling that is $ 4.00.

If sellers gain vigor out to charge a price of $ 4.00 per gallon, quantity demanded (QD) of the gasolene would be lower than quantity supply (QS). This means that in that respect would be a surplus. This is because the price ceiling is a supreme price; it does not prevent the price from falling as it would in this case. Therefore, the price of gasoli! ne will remain $ 3.75 per gallon. The price ceiling is ineffectual. This situation can be shown by using graph as follows: QUESTION 3 Susie receives an recompense from her parents of $ 10 per week. She spends her entire allowance on two goods: cans of hairspray and bubble apply. The price of a can hairspray is $ 2 and the price of a swarm of bubble gum is $ 1. Draw...If you want to get a complete essay, order it on our website: OrderEssay.net

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