Under a Binding Price Ceiling, What Does the Change in Consumer

question 62

Multiple Choice

Under a binding price ceiling, what does the change in consumer surplus represent?

• A) The gain in surplus for those buyers who can still purchase the product at the lower price.
• B) The loss in surplus for those buyers who previously purchased some units of the good at the higher price, but these units are no longer produced at the lower price.
• C) The loss in surplus for those buyers who would like the purchase the excess demand created by the price ceiling policy.
• D) Both A and B are correct.
• E) Both A and C are correct.

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Definitions:

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A statistical measure expressed as an interval, calculated from sample data, indicating where the true population parameter is expected to lie with a specific degree of certainty.

Odds Ratio

A measure of association between an exposure and an outcome, representing the odds that an outcome will occur given a particular exposure, compared to the odds of the outcome occurring without that exposure.

Logistic Regression

A statistical approach for examining a dataset where one or more variables independently influence a result.