If a Price Ceiling on Gasoline Is Imposed, the Total

question 65

Multiple Choice

If a price ceiling on gasoline is imposed, the total price of gasoline a buyer pays is likely to equal the legal price:

• A) minus the value of wasted time.
• B) minus the value of bribery.
• C) plus the value of consumer surplus.
• D) plus the value of corruption.

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Definitions:

Cross-Rate

The implicit exchange rate between two currencies (usually non-U.S.) quoted in some third currency (usually the U.S. dollar).

Exchange Rate

The worth of a certain currency depicted through the value of a different currency.

Foreign Currency Approach

A method in international finance that involves analyzing business or investment decisions based on their impact in foreign currency terms.

Inflation Rate

The increase in the average price levels of goods and services, resulting in reduced purchasing capacity.