1. Effect of Government
Intervention
Unit 2, Chapter 2

2. When Price Ceiling is set
 Excess demand is created
 Suppliers with higher costs are forced to shut
down
 Consumers are naturally rationed out
because the supply is limited
 Only those people who can afford the
opportunity cost can have their demand
fulfilled
 So no one actually benefits in the end as both
consumers and producers both loose

3. Surprise Test
Unit 1 and 2

4. Question of 5 marks each
Please answer the following questions in a
separate sheet of paper.
Make sure your answers are as original as
possible.
Please write the question on the answer
sheet
Please write your Name and roll number at
the top of the answer sheet.

5. Questions
 What is the importance of using theories,
assumptions and models in economics?
 Outline the major differences between micro and
macro economics.
 Develop a demand schedule with the help of an
example and draw a demand curve.
 Explain at least 4 factors that result in a shift in the
supply curve.
 Explain the concept of elasticity. What difference
does time factor make in determining price elasticity
of both demand and supply of durable goods?
 Describe the impact of price controls in the market
mechanism.

6. Questions
 What is the importance of using theories,
assumptions and models in economics?
 Outline the major differences between micro and
macro economics.
 Develop a demand schedule with the help of an
example and draw a demand curve.
 Explain at least 4 factors that result in a shift in the
supply curve.
 Explain the concept of elasticity. What difference
does time factor make in determining price elasticity
of both demand and supply of durable goods?
 Describe the impact of price controls in the market
mechanism.