12 11 10 9 8 7 S 6 S 4 3 2 1 10 20 30 40 50 60 70 80 90 100 110 120 2 Consider that the graph above represents the market for avocados. Suppose that the government imposes a price floor of $4. What is the expected market outcome? None of these answers. 00 There will be a deadweight loss of 15 avocados. There will be a surplus of 30 avocados. There will be a shortage of 30 avocados.

Does a price ceiling change the equilibrium price?

What is consumer surplus? How is it illustrated on a demand and supply diagram?

What is the relationship between quantity Demanded and quantity supplied at equilibrium? What is the relationship when there is a shortage? What is the relationship when them is a surplus?

What is the relationship between total surplus and economic efficiency?

What is the effect of a price ceiling on the quantity demanded of the product? What is the effect of a price ceiling on the quantity supplied? Why exactly does a price ceiling cause a shortage?

What is total surplus? How is it illustrated on a demand and supply diagram?

What would be the impact of imposing a price flour below the equilibrium price?

Explain why the following statement is false: In the goods market, no buyer would be willing to pay more than me equilibrium price.

QUESTION 5 Refer to the graph below showing the Market for Flashlights. 12 10 8 6 4 2 0. 0 60 Supply Demand 100 20 80 Consider that the market for flashlights is described by the graph above and the market is currently in equilibrium. If the government imposes a price floor of $8, then O the market is inefficient at the last flashlight sold because there is a surplus of flashlights in the market. the price sellers are willing to accept for the last unit sold is $8. the market is inefficient at the last flashlight sold because the marginal benefit is less than the marginal cost of that last flashlight. O the price buyers are willing to pay for the last unit sold is $8.