If a Price Ceiling Is Set at $8 in the Market

question 102

Multiple Choice

If a price ceiling is set at $8 in the market shown in the graph:

• A)some surplus will be transferred from consumer to producer.
• B)some surplus will be transferred from producer to consumer.
• C)all consumers will be better off.
• D)all producers will be better off.

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Definitions:

Registered Retirement Savings Plan

A savings and investment account, primarily used in Canada, that provides tax benefits for retirement savings.

Compounded Monthly

Interest calculated and added to the principal balance each month.

Compounded Quarterly

Calculation of interest done four times a year, where the interest is added to the principal and each subsequent interest computation is based on the new principal amount.

Compounded Annually

Pertaining to an interest calculation method where interest is added to the principal at the end of each year, and future interest is calculated on the total.