The value of one more unit of a good or service is its marginal ...

[hubes95]

The value of one more unit of a good or service is its marginal benefit.
 
  Indicate whether the statement is true or false

Question 2

The table above gives the supply and demand schedules for scooters. Because of increased injuries sustained by children riding scooters, Citizens Against Scooter Accidents successfully lobbies the government to impose a price floor of 80.
 
  00 on scooters. a) What is the quantity demanded and supplied after the price floor has been imposed? b) Is there any shortage or surplus at this price floor? If so, how much? c) If the price floor is raised to 110.00, what is the quantity demanded and supplied? d) At a price floor of 110.00, is there any shortage or surplus? If so, how much?

[anoriega3]

Answer to Question 1

TRUE

Answer to Question 2

a) The quantity demanded and supplied is 100 scooters at 90, the equilibrium price. Because the price floor, which is the legal minimum price, is below the equilibrium price, it has no effect. The price stays at the equilibrium price of 90 per scooter and the quantity remains at the equilibrium quantity of 100 scooters.
b) There is no surplus or shortage at a price floor of 90 per scooter.
c) The quantity demanded at 110 is 80 scooters and quantity supplied is 140.
d) There is a surplus. The surplus equals the quantity supplied, 140 scooters, minus the quantity demanded, 80 scooters, or a 60 scooters per week surplus.