In General, Price Controls Have a _______ Effect in the _______

question 35

Multiple Choice

In general, price controls have a _______ effect in the _______ than in the _______ because demand and supply become _______ elastic over time.

• A) larger; long run; short run; more
• B) larger; short run; long run; more
• C) smaller; long run; short run; less
• D) smaller; short run; long run; less

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Definitions:

Rival In Consumption

Describes a type of good where one person's consumption prevents or decreases another's ability to consume the same good.

Corrective Tax

A tax designed to induce private decision makers to take into account the social costs that arise from a negative externality.

Externality

A side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in market prices.

National Defense

Governmental and military actions and policies aimed at protecting a country from external aggression, threats, and maintaining national security.