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    Hurricane Katrina and rationing prices

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    The quetion are self practices on supply and demand.
    3. what would have happen to gasoline production and consumption if the government had prohibited post-Katrina price increase.(see news page 55).
    6. In fig. 3.8 why is the organ demand curve downward-sloping rather than vertical?
    7.The shortage in the organ market (fig 3.8)requires a nonmarket rationing scheme. who should get the available (qa) organs? Is this fairer than the market driven distribution?
    8.What would happen in the apple market if the government set a minimum price of $2.00 per apple? What might motivate such a policy?
    9. The world View on page 61 describes the use of prices to achieve an equilibrium in the kichen. What happen to the food at more traditional restaurants? PLEASE USE MS EXCEL SOFTWARE TO COMPLETE THE GRAPH FOR PROBLEM 9

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    Solution Preview

    3. In effect, not permitting price increases is setting a price ceiling. Your resource tells you what this causes: an increase in the quantity demanded, a decrease in the quantity supplied, and a shortage at the market price.

    6. The organ demand curve is downward sloping because it represents a decreasing ability of organ donors to pay at higher prices. In other words, many people who need organs cannot pay more than a certain price, even if their lives depend on it.

    7. Currently, those who need organs are placed on a waiting list, based on their geographic location and need. ...