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

question 34

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 areas A + C are larger than areas B + D.
• B)effective because area B is smaller than area D.
• C)ineffective because area D is larger than area E.
• D)ineffective because areas A + C + D are larger than areas B + E.

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Definitions:

Lemons

A term that can refer to a type of citrus fruit or, in economics, a product that is found to have defects after it has been bought.

Tangerines

A small citrus fruit with a deep orange color, known for its sweet flavor and easy-to-peel skin.

Punk Rock Video Cassettes

Physical tapes used for recording and playing back video content related to the punk rock music genre.

Garbage

Waste material or unwanted items that are discarded by individuals or communities.