a. Just to review: Back in Chapter 8, we illustrated price ceilings with a horizontal line below the equilibrium price. Did price ceilings create surpluses or shortages?

b. The horizontal line in Figure 9.1 doesn’t represent a surplus or a shortage. What does it represent?

c. Figure 9.1 considers the case of a country that can buy as many semiconductors as it wants at the same world price. Why do people in this country only buy Q d free trade units? Why don’t they buy more of this inexpensive product? pg58