Micro Topic 2.8 Effects of Government Intervention Wm- Suppose a government institutes a binding price ceiling for cell phones. Show the result using a demand and supply graph and answer the following questions. 1. What will happen to the price, quantity demanded and quantity supplied ofcell phones? Pt! QB? QM; 2. Does the ceiling create a shortage or surplus? How can you tell? LCM bikini Owl-WV\" 3. Who benets from the price ceiling? Explain. ' dew'tL 4. Who is harmed by the price ceiling? Explain. o M 5'3 Q1, Q5 '0( (xv mgg The government of Paulaviile decides to set prices of wheat. Use the information in the chart to answer the questions. 7 7 5. Calculate the amount of the shortage or surplus if the Quantity ' government sets a price oor at $2. Supplied ' 7 \" ' '7' ' 6. Calculate the amount of the shortage or surplus if the government sets a price oor at $10. ' 7. Calculatethe amount of the shortage or surplus if the government sets a price ceiling at $10. 8. Calculate the amount of the shortage or surplus if the government sets a price ceiling at $1. mumm- Answer the questions- 9. Assume the government of P'aulaville establishes a price floor for wheat at $10 and agrees to purchase any excess wheat that. consumers don't buy. Calculate the amount of the shortage or surplus at the price floorof $10. Explain your answer. 10. Identify one reason why the government might implement a price floor on wheat even though economists generally agree that it would result in a less efcient market