Mortimer Loves Sushi

question 23

Multiple Choice

Mortimer loves sushi.He loves sushi so much that he asks his congressional representative to work for passage of a binding price ceiling law.Who would be affected by this law and how?

• A) Sellers would benefit from such a law because they would receive a higher price for their product.
• B) Consumers would benefit from such a law because prices would be lower and all would be able to purchase sushi cheaply.
• C) Consumers would benefit from such a law because the sushi would be made of higher-quality fish, and each serving would be larger than it had been with no binding price ceiling in place.
• D) Some consumers would benefit from such a law because prices for sushi would be lower for those able to buy it in the legal market.
• E) Sellers would benefit from such a law because they would be able to sell higher-quality sushi and thus capture a larger share of the market.

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Definitions:

LIFO

Last In, First Out, an inventory accounting method where the most recently produced items are recorded as sold first.

FIFO

"First In, First Out," an inventory valuation method where goods purchased or produced first are sold or used first.

Exchange Gain

A profit resulting from foreign currency transactions, due to favorable changes in exchange rates.

Exchange Rate

The rate at which one currency can be exchanged for another, often determined by financial markets or government policy.