Price Ceilings and Floors- Micro Topic 2.8

Mr. Clifford explains price controls, focusing on price ceilings and floors. He uses examples like gas and corn prices to illustrate how these controls affect supply and demand, leading to shortages or surpluses. The video also distinguishes between micro and macroeconomics, emphasizing the importance of understanding supply and demand in both contexts.

What is the effect of setting a price ceiling below the equilibrium price?

• It increases the equilibrium price.

• It has no effect on the market.

• It causes a shortage of goods.

• It leads to a surplus of goods.

How does a price floor above the equilibrium price affect the market?

• It results in a shortage of goods.

• It causes a surplus of goods.

• It has no impact on the market.

• It decreases the supply of goods.

Why might students mistakenly think a price ceiling should be above equilibrium?

• Because it would stabilize prices.

• Because it would increase supply.

• Because ceilings are typically high.

• Because it would decrease demand.

In the context of price controls, what is a common misconception about price floors?

• They always benefit consumers.

• They should be set below equilibrium.

• They should be set above equilibrium.

• They have no effect on supply.

What is the primary focus of microeconomics as mentioned in the video?

• Analyzing GDP and inflation.

• Studying taxes and elasticity.

• Understanding aggregate demand.

• Examining unemployment rates.