Do Price Ceilings Misallocate Resources

question 151

Multiple Choice

Do price ceilings misallocate resources?

• A) Yes, because people who value the good the most are unable to bid it away from low-valued uses.
• B) Yes, because people who value the good the least are unable to afford the good.
• C) No, because the good is still allocated based on willingness to pay.
• D) No, because the rich and poor alike stand an equal chance of getting the good.

---

Definitions:

Positive Correlation

A statistical relationship in which the values of two variables increase together or decrease together.

Negative Correlation

A statistical relationship in which the value of one variable increases while the other variable decreases.

Correlational Study

A type of research method that examines the relationship between two or more variables to determine whether they are associated or have a correlation, without implying causation.

Tentative Explanation

An initial, provisional hypothesis proposed to explain a phenomenon or observation, subject to further testing and investigation.