Price Ceilings Create Five Important Effects

question 252

Multiple Choice

Price ceilings create five important effects:

• A) shortages, reductions in product quality, wasteful lineups, a loss from gains to trade, and a misallocation of resources.
• B) surpluses, increases in product quality, search costs, gains from trade, and resource attrition.
• C) excess demand, long lines, poor service, efficiency, and arbitrage.
• D) shortages, reduced time costs, low vacancy rates, blat, and deadweight loss.

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Definitions:

Organization

A structured group of people working together to achieve specific goals.

Characteristics

Qualities or features that are typical of a person, thing, or group and serve to identify them.

Delegation

The assignment of responsibility or authority from one person to another for specific tasks or functions.

Organic Company

A business that is flexible, adaptive, and informal in its structure and operations, often contrasted with more bureaucratic, traditional firms.