Tham khảo tài liệu 'câu hỏi đánh giá môn kinh tế vĩ mô bằng tiếng anh- chương 9', kinh tế - quản lý, kinh tế học phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Chapter 9 The Analysis of Competitive Markets CHAPTER 9 THE ANALYSIS OF COMPETITIVE MARKETS REVIEW QUESTIONS 1. What is meant by deadweight loss Why does a price ceiling usually result in a deadweight loss Deadweight loss refers to the benefits lost to either consumers or producers when markets do not operate efficiently. The term deadweight denotes that these are benefits unavailable to any party. A price ceiling will tend to result in a deadweight loss because at any price below the market equilibrium price quantity supplied will be below the market equilibrium quantity supplied resulting in a loss of surplus to producers. Consumers will purchase less than the market equilibrium quantity resulting in a loss of 117 Chapter 9 The Analysis of Competitive Markets surplus to consumers. Consumers will also purchase less than the quantity they demand at the price set by the ceiling. The surplus lost by consumers and producers is not captured by either group and surplus not captured by market participants is deadweight loss. 2. Suppose the supply curve for a good is completely inelastic. If the government imposed a price ceiling below the market-clearing level would a deadweight loss result Explain. When the supply curve is completely inelastic the imposition of an effective price ceiling transfers all loss in producer surplus to consumers. Consumer surplus increases by the difference between the market-clearing price and the price ceiling times the market-clearing quantity. Consumers capture all decreases in total revenue. Therefore no deadweight loss occurs. 3. How can a price ceiling make consumers better off Under what conditions might it make them worse off If the supply curve is perfectly inelastic a price ceiling will increase consumer surplus. If the demand curve is inelastic price controls may result in a net loss of consumer surplus because consumers willing to pay a higher price are unable to purchase the price-controlled good or service. The loss of consumer
