If the Government Imposes a Binding Price Ceiling on a Market

question 141

Multiple Choice

If the government imposes a binding price ceiling on a market, then the price paid by buyers will

• A)decrease, and the quantity sold in the market will decrease.
• B)increase, and the quantity sold in the market will increase.
• C)increase, and the quantity sold in the market will decrease.
• D)decrease, and the quantity sold in the market will increase.

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Definitions:

Court of Chancery

A court that historically dealt with disputes in equity, such as trusts and estates, rather than legal claims.

Law of Equity

A body of law that supplements the common law and corrects injustices by providing remedies not available in courts of law.

Common-law Courts

Courts that base their decisions on the common law system, which is built on precedent and judicial decisions, as opposed to statutory law.

Private Clubs

Membership-based organizations with selective admission policies, often for social, recreational, or professional purposes.