Table of contents

1. Introduction to Macroeconomics1h 57m
2. Introductory Economic Models59m
3. Supply and Demand3h 43m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Price Floors3h 40m
6. Introduction to Taxes1h 25m
7. Externalities1h 3m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. Introducing Economic Concepts49m
11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)1h 37m
12. Unemployment and Inflation1h 15m
13. Productivity and Economic Growth1h 17m
14. The Financial System1h 37m
15. Income and Consumption52m
16. Deriving the Aggregate Expenditures Model1h 22m
17. Aggregate Demand and Aggregate Supply Analysis1h 18m
18. The Monetary System1h 1m
19. Monetary Policy1h 32m
20. Fiscal Policy1h 0m
21. Revisiting Inflation, Unemployment, and Policy46m
22. Balance of Payments30m
23. Exchange Rates1h 16m
24. Macroeconomic Schools of Thought40m
25. Dynamic AD/AS Model35m
26. Special Topics11m

5. Consumer and Producer Surplus; Price Ceilings and Price Floors

Price Ceilings, Price Floors, and Black Markets

Macroeconomics

5. Consumer and Producer Surplus; Price Ceilings and Price Floors

Price Ceilings, Price Floors, and Black Markets

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Multiple Choice

All of the following are problems associated with price ceilings except:

chronic excess demand

an eventual decline in the number of suppliers

the need to use ration coupons to purchase a good

chronic excess supply

landlords failing to maintain rent-controlled properties adequately

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Verified step by step guidance

Understand what a price ceiling is: A price ceiling is a government-imposed limit on how high a price can be charged for a product. It is usually set below the equilibrium price to make goods more affordable.

Identify the typical effects of a price ceiling: Price ceilings often lead to shortages (chronic excess demand) because the price is kept artificially low, leading to higher demand and lower supply.

Consider the impact on suppliers: With a price ceiling, suppliers may not find it profitable to produce or sell the good, leading to a decline in the number of suppliers over time.

Examine the need for rationing: Due to the shortage created by the price ceiling, governments or sellers might need to use ration coupons to distribute the limited supply of goods fairly among consumers.

Recognize the exception: Chronic excess supply is not a problem associated with price ceilings. Instead, it is associated with price floors, where the price is set above the equilibrium, leading to a surplus.