If the Intended Aim of the Price Ceiling Set at $6

question 113

Multiple Choice

If the intended aim of the price ceiling set at $6, as shown in the graph, was a net increase in the well-being of consumers, then positive analysis would conclude that the policy was:

• A)effective because the surplus gained by consumers through lower prices is greater than the surplus they lost due to fewer transactions taking place.
• B)ineffective because the surplus gained by consumers through lower prices is less than the surplus they lost due to fewer transactions taking place.
• C)effective because the surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices.
• D)ineffective because the amount of deadweight loss is greater than the surplus gained by consumers from lower prices.

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Definitions:

Parturition

The act or process of giving birth; childbirth.

Micturition

The act of urinating or voiding the bladder.

Gastrulation

An initial stage in the embryonic growth of many animals, where the blastula, which originally has a single layer, transforms into a gastrula, a structure with multiple layers.

Organogenesis

The process in embryonic development during which the organs are formed from the three germ layers.