Suppose You Live in a Community with No Price Controls

question 22

Multiple Choice

Suppose you live in a community with no price controls.What do you expect will happen if your town borders a community where there is a non-binding price ceiling on most products?

• A) Legal market prices will rise in the community with a binding price ceiling.
• B) Legal market prices will fall in the community with a binding price ceiling.
• C) The price and the quantity sold in the community without a non-binding price ceiling will be the same as the price and quantity in the community with a non-binding price ceiling.
• D) There will be more shortages in the community with a binding price ceiling.
• E) The black market in the community with a binding price ceiling will not be strong because consumers will simply purchase the product in the community that has no price ceiling.

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Definitions:

Smallpox

A contagious, disfiguring, and often deadly disease that has been eradicated globally thanks to vaccination.

Prenatal Development

The process by which a baby develops inside the mother's womb or uterus, spanning from conception to birth.

Embryonic Stage

A critical phase in prenatal development that occurs from the end of the second week to the end of the eighth week after fertilization, during which the major organs and structures of the organism begin to develop.

Foetal Stage

The stage of human development inside the womb from the end of the embryonic stage to birth.