Chapter 4 QUESTIONS FOR FURTHER THOUGHT AND DISCUSSION 1. a. If market price is above equilibrium price, explain what happens and why. b. If market price is below equilibrium price, explain what happens and why. 2. a. As the price of theater tickets rises, what happens to the quantity of tickets that people are willing to buy? Explain your answer. b. As the price of theater tickets rises, explain what happens to the quantity of tickets that people are willing to sell. Explain your answer. 3. Where is a price ceiling with respect to equilibrium price? What will be the relative size of quantity demanded and quantity supplied? 4. How is equilibrium price affected by changes in (a) demand and (b) supply? 5. What are the two ways to depict a demand schedule? Make up a demand schedule for some good or service you often buy. 6. What is equilibrium? Why is it advantageous for the market price to be at equilibrium? 7. If you were a landlord, why would you be against rent control? A shortage occurs when the market price is below the equilibrium price. 8. Practical Application: How would the abolition of rent control reduce the housing shortage in some cities? Explain in terms of supply and demand. 9. Practical Application: Urban highways are usually very congested during morning and evening commuting times. Using supply and demand analysis, what simple step could be taken to greatly reduce congestion