In the Late 1500s, the City of Antwerp Was Under

question 146

Multiple Choice

In the late 1500s, the city of Antwerp was under siege by the Duke of Parma. The siege caused the price of food to rise so the government of Antwerp established a price ceiling set at a value similar to that before the siege. (This bears a striking resemblance to modern anti-gouging laws used in times of disaster.) Merchants, fearing the Duke's ability to sink their ships, refused to ferry food into the city that they could only sell at a normal price. Which important effect of a price control BEST describes this story?

• A) reduction of product quality
• B) wasteful lines
• C) a loss in gains from trade
• D) a misallocation of resources

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Definitions:

Compensatory

Refers to mechanisms or behaviors aimed at offsetting deficiencies or disadvantages.

Western Culture

A social and cultural tradition originating from Western Europe and broadly influencing the Americas, Australia, and parts of Asia, characterized by emphasis on individualism, democracy, and scientific progress.

Empirical Science

A science based on observation and experiment rather than theory alone.

Materialism

The belief or attitude that physical possessions and their acquisition are more important than spiritual or ethical values.