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In the 1980s, long lines for essential goods such as bread a…

In the 1980s, long lines for essential goods such as bread and sugar were common in self-described socialist countries like the former Soviet Union and North Korea, largely due to government-imposed price ceilings on these goods. Since then, the former Soviet Union has transitioned to a market economy by eliminating price ceilings, while North Korea has retained them. Based on these changes, what would you predict about the presence or absence of long lines for essential goods in both the former Soviet Union and North Korea today? Explain the reasoning behind your predictions.

Part II – Short Answer Thirty points total, ten points each…

Part II – Short Answer Thirty points total, ten points each.  Answer three only.   Please answer the questions in three boxes below.  Suppose the government in response to angry voters during the summer imposes a price ceiling on cold beverages of $1.00 per can.  However, the market price is $2.00 per can.  What would you expect the outcome to be?  What is the circular flow model?  What key concept does this model illustrate? What is a normal and an inferior good?  How do these concepts relate to income? Choose one of the ten principles of economics and discuss.