1What are the drawback of price floor
2. China is a big manufacturer of telephone instruments. It has recently become a member of WTO. Suppose it does export a large number of telephones to India
(a) How will it affect price and quantity sold of telephone instruments in India.
(b) Suppose demand for telephone instruments in relatively elastic. How will it affect I India's total expenditure on telephone instrument
3. If the govt. aims to attract investors for opening production units in the backward regions of the country. Explain what steps the govt. can take in this direction through its budget.
4.As a result of drought and floods, the govt. of India should reduce the export of food grains. What role can the govt. play in this case.
Dear Student,
1. The drawbacks of price floor is explained in detail in our study material. You can refer to the same following the below mentioned link and scroll down to the topic 'Effects of Imposition of Price Floor'.
https://www.meritnation.com/cbse/class12-commerce/studymaterial/economics/introductory-microeconomics/market-equilibrium/338_1984_5824#slide4_price-ceiling-price-floor-and-wage-determination
2. (a) When China export a large number of telephones to India, then it will lead to increase in supply as a result supply curve will shift fromm S1S1 to S2S2. Thus, market price will fall from P1 to P2 and quantity supplied will increase from q1 to q2.
(b) When the demand for telephone is relatively elastic, it means that fall in price will result in increase in total expenditure on telephone instruments in India.
I want to make an humble request to you. As here in this thread, you have asked five questions altogether. This makes our indexing mechanism inefficient. Thus, we hereby request you to ask a single question in a single thread. This will be highly beneficial for our other students to go through your questions. Please abide by this from the next time on.
1. The drawbacks of price floor is explained in detail in our study material. You can refer to the same following the below mentioned link and scroll down to the topic 'Effects of Imposition of Price Floor'.
https://www.meritnation.com/cbse/class12-commerce/studymaterial/economics/introductory-microeconomics/market-equilibrium/338_1984_5824#slide4_price-ceiling-price-floor-and-wage-determination
2. (a) When China export a large number of telephones to India, then it will lead to increase in supply as a result supply curve will shift fromm S1S1 to S2S2. Thus, market price will fall from P1 to P2 and quantity supplied will increase from q1 to q2.
(b) When the demand for telephone is relatively elastic, it means that fall in price will result in increase in total expenditure on telephone instruments in India.
I want to make an humble request to you. As here in this thread, you have asked five questions altogether. This makes our indexing mechanism inefficient. Thus, we hereby request you to ask a single question in a single thread. This will be highly beneficial for our other students to go through your questions. Please abide by this from the next time on.