Section+6.1

1.)What is unique about an equilibrium price? AN equilibrium price is unique because it is when he supply and demand is equal 2.)What situation can lead to excess demand? Lower prices can lead to a higher demand. 3.)How is a price floor different from a price ceiling? Price floor is when a minimum is put for a price on something and price ceiling is when you put a maximum 4.)How does rent control work? Rent Control is when a price ceiling is put on rent. 5.)Turn to the graph of median weekly earnings on page 536 in the Databank. Suppose that the federal government has raised the minimum wage to $600 per week. a.)Which category of jobs would be least affected by the change? Sales and office b.)Which two categories would be most affected by the new minimum wage? Management and professional and service c.)What are the likely consequences for workers in these two fields? Management and professional will make less money and Service will make more 6.)What are the benefits and drawbacks of price ceiling? The benefits is for the person who is buying the thing that has the price ceiling on it because they know that they will not have to pay more. It is bad for the person who is supplying the good or service though because they will be loosing money if it is not the equilibrium price. 7.)The graph below shows supply and demand curves in the notebook market. Use what you have learned in this section to identify the following elements of the graph: price floor, supply curve, equilibrium point, disequilibrium point,demand curve, price ceiling. a.) Equilibrium b.) Demand c.) supply d.) excess demand e.) Excess supply