Scenario 6-1
Suppose That Demand in the Market for Good $$Q ^ { D } = 30 - P$$

question 176

Essay

Scenario 6-1
Suppose that demand in the market for good X is given by the equation
$$Q ^ { D } = 30 - P$$ and that supply in the market for good X is given by the equation
$$Q ^ { S } = 2 P$$
-Refer to Scenario 6-1. If the government set a price floor at $7, would there be a shortage or surplus, and how large would be the shortage/surplus?

Understand the impact of in-kind transfers on poverty measurement.

Discuss the impact of government policies on income distribution and poverty.

Assess the importance of equality of opportunity versus equality of outcomes.

Examine the role of life-cycle and temporary income variations in economic analysis.

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Definitions:

Drive Reduction Theory

A theory of motivation that posits individuals are motivated to take actions in order to reduce the internal tension caused by unmet needs.

Homeostasis

The tendency of a biological system to maintain stable internal conditions despite external changes.

Homeostasis

The tendency of a biological system to maintain stability while adjusting to conditions that are optimal for survival.

Yerkes-Dodson Law

A theory suggesting there is an optimal level of arousal for the best performance of a task; too little or too much arousal can negatively affect task performance.