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CONCEPTShifts in Demand5Jack is willing to pay as much as $1,300 for a new camera but is happy to find one he likes that costs $400.Select the term below that corresponds to this situation.Consumer surplusCeteris paribusEquilibriumProducer surplusCONCEPTConsumer Surplus6If a certain brand of furry boots are suddenly all the rage and the market price increases to $500 a pair, but very few people buy them because they are too expensive, which of the following will happen next? The price will rise until it reaches equilibrium. The price will stay the same. The price will fall until it reaches equilibrium. The price will continue to rise indefinitely. CONCEPTPrevailing Price7Which of the following is true about price ceilings?
The moment when a price ceiling is above equilibrium, it prevents price increases.More sellers are willing to sell when a price ceiling has been set.A price ceiling has to be higher than equilibrium in order to be binding.Binding price ceilings can cause shortages of certain products.