In Competitive Markets, Binding Price Floors and Binding Price Ceilings

question 49

Multiple Choice

In competitive markets, binding price floors and binding price ceilings lead to

• A) a reduction in deadweight loss.
• B) an overall increase in economic surplus, and therefore to market efficiency.
• C) a maximization of economic surplus.
• D) fairer prices for consumers and producers, and therefore are better for society as a whole.
• E) an overall reduction in economic surplus, and therefore to market inefficiency.

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Definitions:

Median

A measure of central tendency that divides a data set into two equal halves by finding the value in the middle when the data is organized in ascending or descending order.

Mean

A statistical measure that represents the average value of a set of numbers.

Extreme Scores

Values or data points in a set that are significantly higher or lower than the majority, often influencing the overall analysis or interpretation of the data.

Measure of Central Tendency

A statistical measure that describes the center of a data set; common examples include the mean, median, and mode.