Prohibiting Price Increases in Situations of True Scarcity

question 49

Multiple Choice

Prohibiting price increases in situations of true scarcity

• A)prevents the market mechanism from reallocating resources more efficiently.
• B)discourages production.
• C)may lead to extreme shortages of vitally needed products.
• D)All of the above are correct.

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Definitions:

Cannon-Bard Theory

A theory of emotion that argues that physiological arousal and emotional experience occur simultaneously, yet independently.

Physiological Symptoms

Observable body responses to various stimuli, indicating a reaction, such as increased heart rate, sweating, or a rash, in relation to emotions, disease processes, or environmental factors.

Physical Arousal

A cardiovascular, electrodermal, and hormonal reaction, preparing an individual for a vigorous physical activity.

Schachter and Singer

Psychologists who proposed the two-factor theory of emotion, which suggests that emotion is based on physiological arousal and cognitive labeling.