If a Government Imposes a $2 Maximum Price on a Gallon

question 86

Multiple Choice

If a government imposes a $2 maximum price on a gallon of gasoline in the petroleum market, this would be an example of

• A) a price ceiling.
• B) a price floor.
• C) rent control.
• D) laissez-faire.

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Definitions:

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, sometimes at the cost of accuracy or completeness.

Sunk Cost Effect

This is the economic concept that people are likely to continue an endeavor if they have already invested time, effort, or money into it, regardless of the current costs or benefits.

Prototype

A prototype is an early sample, model, or release of a product built to test a concept or process.

Broca's Aphasia

A neurological condition characterized by difficulties in producing speech due to damage to Broca's area in the frontal lobe of the brain, often leaving the individual able to understand language but with impaired speaking ability.