Reading Guide: Section 2 Module 9
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AP Economics Class Period
What do I already think I know?
What do you think would happen if the quantity of a product is limited by the government?
What do you think a deadweight loss is?
1. What is a good reason to impose a quota or quantity control?
2. What is the demand price of 8 million rides demanded?
3. Based on Figure 9.1, how many taxi rides would drivers be willing to supply at a price of $6.00 per ride?
4. At a quantity of 8, what is the demand price and the supply price?
$6 & $2
$6 & $4
$5 & $5
5. Why do you think the term "wedge" is appropriate for a market with a quota?
6. Explain why Sunil's opportunity cost is $2 to use his medallion.
7. Read the definition and application of deadweight loss...not refer to the graph above and explain why the yellow area is considered deadweight loss.
Watch this...why would you NOT?!?!?!?
Are there any questions that you still have that you would like answered in class?
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