If the Government Fixes the Price of Good X Above

question 74

Multiple Choice

If the government fixes the price of good X above its free- market equilibrium level, we should expect

• A) a shortage of good X to occur.
• B) a new free- market equilibrium price to be established.
• C) a surplus of good X to occur.
• D) an excess demand for good X.
• E) a black market to arise for good X.

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Definitions:

Midbrain

A portion of the brainstem that plays an important role in vision, hearing, motor control, sleep/wake, arousal (alertness), and temperature regulation.

Pons

A part of the brain located above the medulla oblongata and in front of the cerebellum, playing key roles in the regulation of breathing and sleep.

Hypothalamus

A region of the brain that coordinates both the autonomic nervous system and the activity of the pituitary, controlling body temperature, thirst, hunger, and other homeostatic systems.

Eyeball

The globular organ housed in the orbit of the skull through which we see, consisting of the cornea, lens, retina, and more.