wage? It is more complex than simply producers lose and workers gain. Who are the winners and who are

the losers, and what exactly do they win and lose? To what extent does the policy change achieve its goals?

47. Agricultural price supports result in governments holding large inventories of agricultural products. Why

do you think the government cannot simply give the products away to people experiencing poverty?

48. Can you propose a policy that would induce the market to supply more rental housing units?

49. What term would an economist use to describe what happens when a shopper gets a “good deal” on a

product?

50. Explain why voluntary transactions improve social welfare.

51. Why would a free market never operate at a quantity greater than the equilibrium quantity? Hint:What

would be required for a transaction to occur at that quantity?

Problems

52. Review Figure 3.4 again. Suppose the price of gasoline is $1.00. Will the quantity demanded be lower or
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