Question

explain in detail how price ceiling gives rise to black marketing and price floor to buffer stocks.?

Answer 1

sometimes government engage some quota to control the excessive demand of some particular thing. When this happen people tend to pay extra price to get the amount above the assigned quota this gives rise to black market. 

While in price flooring. THe supply is in excess as compare to demand, so they start supplying at low price and set a price floor. The addition amount that is left behind after the sale is kept as buffer stock that can be used when the conditions change and demand suddenly increases. 

Answer 2

Explanation:

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Answer: Budget Set: Budget set refers to the attainable combinations of a setof two goods, given prices of the goods and income of the consumer. ... Similarly, if income of the consumer remains unchanged, the budget linewill shift to the right when there is a proportionate fall in the prices of both goods X and Y.