NAMESUPPLY AND DEMAND - 3.5.6Price Ceilings and Price FloorsHomeworkDIRECTIONSEach of these three news articles describes either a government-imposed price ceiling or price floor. Readthe title and excerpt, and then answer the questions that follow.RUSSIA MAY SET PRICE CEILING FOR STAPLE FOODS AS DROUGHT FUELS INFLATION14 August 2010 - by Anton Doroshev & Maria Levitov (Bloomberg)Russia may set retail price ceilings for basic foods, Deputy Industry and Trade Minister Stanislav Naumov said. The worst drought in atleast 50 years has slashed harvests across Russia, fueling inflation..Naumov told reporters today in Moscow "It's necessary to institute amaximum retail price for those products that are in short supply".President Dmitry Medvedev's top economic advisor said he opposesimposing maximum prices.1) Suppose the following data represents themarket for Russian staple foods. Use this datato construct the graph for this market.2) At equilibrium, what are the following?a) Price:b) Quantity Demanded:c) Quantity Supplied:Price (Rubles)DemandSupply6002003) Suppose Stanislav Naumov decides to put aprice ceiling at 3 rubles. Draw this price ceilingon the graph.a) New quantity demanded:255025035003004450350b) New quantity supplied:c) Amount of shortage:540040063504504) Why might Dmitry Medvedev's top economicadvisor oppose a price ceiling?Russian Staple Foods10020030040050600700Quantity (millions of pounds)S ECONΟΜICSCopyright © 2013 N.S.PAGE 1Price (Rubles) PRICE CEILINGS AND PRICE FLOORS HOMEWORKSUPPLY AND DEMAND - 3.5.6MILK PRICES DESERVE FLOORC) S.C. LEGISLATOR WANTS TO CAP GASPRICES23 February 2012 - by Arden Tewksbury (Capital Press)6 June 2011 - by Ron Barnett (USA Today)Several national and multi-state organizations have sent a letterto all members of Congress urging them to place a price floor of$20 per hundredweight under all milk used for manufacturingdairy products.According to USDA figures the all-milk price in2009 was $12.80 per hundredweight and the average cost ofproducing milk in 2009 was $22.28 per hundredweight.South Carolina state Sen. Dick Elliott has a solution for highgasoline prices: Cap how much oil companies can raise them.."ldon't like to interfere with the competitive free enterprisesystem, but in this case we don't believe the competitive freeenterprise system is fully at work," he says.5) Use the following data to construct the graphfor the market for milk.9) Use the following data to construct the graphfor the market for gasoline.Price ($)10 12 14 16 18202224Price ($)2.502.753.003.253.503.75Demand400 375 350 325 300 275 250 225Demand343128252219Supply200 300 400 500 600 700 800 900Supply151020253035MilkGasoline$26$4.00$24$3.75$22$3.50$20$3.25$18$16$3.00$14$2.75$12$2.50$10$8$2.25100200300400500600700800900100010152025303540Quantity of Hundredweights (millions)Quantity (millions of barrels)6) At equilibrium, what are the following?10) At equilibrium, what are the following?a) Price:a) Price:b) Quantity:7) Suppose the price floor of $20 gets approved.Draw the price floor on the graph.b) Quantity:I1) Suppose a price ceiling of $2.75 gets passed inCongress. Draw the price ceiling on the graph.a) New quantity demanded:b) New quantity supplied:c) Amount of shortage:12) This price ceiling is designed to helpconsumers. How might it actually end uphurting consumers instead?a) New quantity demanded:b) New quantity supplied:c) Amount of surplus:8) The author is in favor of the price floor. Doyou agree with him? Why or why not?($) aɔHdPrice ($)

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NAMESUPPLY AND DEMAND - 3.5.6Price Ceilings and Price FloorsHomeworkDIRECTIONSEach of these three news articles describes either a government-imposed price ceiling or price floor. Readthe title and excerpt, and then answer the questions that follow.RUSSIA MAY SET PRICE CEILING FOR STAPLE FOODS AS DROUGHT FUELS INFLATION14 August 2010 - by Anton Doroshev & Maria Levitov (Bloomberg)Russia may set retail price ceilings for basic foods, Deputy Industry and Trade Minister Stanislav Naumov said. The worst drought in atleast 50 years has slashed harvests across Russia, fueling inflation..Naumov told reporters today in Moscow &#34;It's necessary to institute amaximum retail price for those products that are in short supply&#34;.President Dmitry Medvedev's top economic advisor said he opposesimposing maximum prices.1) Suppose the following data represents themarket for Russian staple foods. Use this datato construct the graph for this market.2) At equilibrium, what are the following?a) Price:b) Quantity Demanded:c) Quantity Supplied:Price (Rubles)DemandSupply6002003) Suppose Stanislav Naumov decides to put aprice ceiling at 3 rubles. Draw this price ceilingon the graph.a) New quantity demanded:255025035003004450350b) New quantity supplied:c) Amount of shortage:540040063504504) Why might Dmitry Medvedev's top economicadvisor oppose a price ceiling?Russian Staple Foods10020030040050600700Quantity (millions of pounds)S ECONΟΜICSCopyright © 2013 N.S.PAGE 1Price (Rubles) PRICE CEILINGS AND PRICE FLOORS HOMEWORKSUPPLY AND DEMAND - 3.5.6MILK PRICES DESERVE FLOORC) S.C. LEGISLATOR WANTS TO CAP GASPRICES23 February 2012 - by Arden Tewksbury (Capital Press)6 June 2011 - by Ron Barnett (USA Today)Several national and multi-state organizations have sent a letterto all members of Congress urging them to place a price floor of$20 per hundredweight under all milk used for manufacturingdairy products.According to USDA figures the all-milk price in2009 was $12.80 per hundredweight and the average cost ofproducing milk in 2009 was $22.28 per hundredweight.South Carolina state Sen. Dick Elliott has a solution for highgasoline prices: Cap how much oil companies can raise them..&#34;ldon't like to interfere with the competitive free enterprisesystem, but in this case we don't believe the competitive freeenterprise system is fully at work,&#34; he says.5) Use the following data to construct the graphfor the market for milk.9) Use the following data to construct the graphfor the market for gasoline.Price ($)10 12 14 16 18202224Price ($)2.502.753.003.253.503.75Demand400 375 350 325 300 275 250 225Demand343128252219Supply200 300 400 500 600 700 800 900Supply151020253035MilkGasoline$26$4.00$24$3.75$22$3.50$20$3.25$18$16$3.00$14$2.75$12$2.50$10$8$2.25100200300400500600700800900100010152025303540Quantity of Hundredweights (millions)Quantity (millions of barrels)6) At equilibrium, what are the following?10) At equilibrium, what are the following?a) Price:a) Price:b) Quantity:7) Suppose the price floor of $20 gets approved.Draw the price floor on the graph.b) Quantity:I1) Suppose a price ceiling of $2.75 gets passed inCongress. Draw the price ceiling on the graph.a) New quantity demanded:b) New quantity supplied:c) Amount of shortage:12) This price ceiling is designed to helpconsumers. How might it actually end uphurting consumers instead?a) New quantity demanded:b) New quantity supplied:c) Amount of surplus:8) The author is in favor of the price floor. Doyou agree with him? Why or why not?($) aɔHdPrice ($)

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