Reference: Ref 8-9 (Figure: Price Ceilings and Consumer Surplus) Refer

question 60

Multiple Choice

Reference: Ref 8-9 (Figure: Price Ceilings and Consumer Surplus) Refer to the figure. There is a price ceiling of $20. What is the value of consumer surplus if all the goods are allocated randomly?

• A) $120
• B) $180
• C) $80
• D) None of the answers is correct.

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Definitions:

Futures Price

The predetermined price at which a futures contract is agreed upon to buy or sell an asset at a future date.

Short Hedge

A risk management strategy used to offset potential losses in investments by taking an opposite position in related assets or derivatives.

Spot Market

A public financial market where commodities or financial instruments are traded for immediate delivery.

Futures Market

A standardized market for buying and selling contracts that obligate the delivery of commodities, currencies, or financial instruments at a future date.