module 18 review 1.what causes markets to move towards equilibrium, even after shifts in demand and/or supply? 2.what causes a true shortage?... a true surplus? 3.what is a government “price ceiling” and whom is it trying to help: consumers or producers? 4.what is a government “price floor” and whom is it trying to help: consumers or producers?

EXAMPLE: rent-controlled apartments in New York

The rent-controlled apartments Example of PRICE CEILINGS 1.why is there a shortage of apartments in New York? 2.why are the quantity demanded and the quantity supplied not in equilibrium? 3.which is greater: quantity supplied or quantity demanded? how can you tell? 4.is this price ceiling effective? how can you tell? 5.what would make this an ineffective price ceiling?

EXAMPLE: the market for dry milk

1.why is there a surplus of dry milk? 2.why is the market for dry milk not at equilibrium? 3.which is greater: quantity supplied or quantity demanded? how can you tell? 4.is this price floor effective? how can you tell? 5.what would make this an ineffective price floor? the dry milk market Example of PRICE FLOORS

What are the PROS and CONS of price ceilings? What are the PROS and CONS of price floors?