1 Suppose the government sets the maximum price for a normal

1) Suppose the government sets the maximum price for a normal doctor\'s visit at $20, but the current market price is $40. As a result of this government action, doctors will see: O a) fewer patients. b) the same number of patients. O c) more patients. Submit You currently have O submissions for this question. Only 10 submission are allowed. You can make 10 more submissions for this question. (Survey Question) 2) Please provide your rationale for your answer to the previous question. Submit You currently have O submissions for this question. Only 10 submission are allowed. You can make 10 more submissions for this question 3) If the government guarantees sugar farmers a price of $1 per pound when the market equilibrium price is actually $0.50 per pound, which of the following will occur? Oa) A shortage of sugar will occur, increasing inefficiency. b) A shortage of sugar will occur, decreasing inefficiency. O c) A surplus of sugar will occur, increasing inefficiency. d) A surplus of sugar will occur, decreasing inefficiency. Submit You currently have O submissions for this question. Only 10 submission are allowed You can make 10 more submissions for this question.

Solution

1) few patient

W) it is because normally supply curve is yoward sloping and demand is downward sloping

Since price is below equilibrium price, doctor will supply less service to the patient due to which there will be excess demand of doctor.

3)C there will be surplus of supply which increases inefficiency

4) it is because to be efficient production the marginal cost of producing a last unit of output should be equal to the willingness to pay for that unit. Due to price floor which is above equilibrium price there will be surplus and inefficiency.