Question: 1 use a diagram to explain how a so called black market can develop when the government intervenes in th price mechanism by fixing prices.

1 use a diagram to explain how a so called black market can develop when the government intervenes in th price mechanism by fixing prices.

2 with the aid of diagrams differentiate between a price ceiling and a price floor as government interventions measures to market failure.

3 discuss the welfare effects of government intervention in the form of legislation that sets the minimum wage rate above equilibrium wage rate.support your discussion with the diagram.

4 describe how the market will react to the introduction of a statutory minimum wage,indicate what likely effect would be on the unemployment situation in south africa.

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