Ch. 6 SG

1. What example of a price ceiling does the text give? Explain.
2. Why do few people benefit from price ceilings?
3. How do rent control laws affect price equilibrium?
4. What two examples of price floors does the text give? Explain?
5. What will happen to suppliers in a market if there is a surplus of the good they sell, but no supplier can afford to lower prices?
6. List three reasons why a price-based system works more efficiently than central planning.
7. What do you think Adam Smith would think of rationing? Explain.
8. How do prices act as a “language” in the free market?.
9. What alternative is there to participating in a market controlled by government?
10. What’s another term for externalities? How does it affect price and supply?

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