Economics for Managers

Kazakhstan Institute of Management, Economics, and Planning

Summer, 2001

Meeting Ten

Topics for the day:

Price Ceiling

Price Floor

Externalities

Regulation of Business

Trade Restrictions

Principle of Comparative Advantage

Quiz 8

Work in small groups (maximum 3)

  1. Assume a cabbage market where--

Qd = 60 – P

Qs = 10 + P
  1. Find Consumer Surplus, Producer Surplus and Social Surplus before and after a price ceiling of 20 tenge is imposed on cabbage.
  2. Graph the problem

2. Define and give original examples of both a negative and positive externality.
Hosted by www.Geocities.ws

1