What Are the Major Problems That Will Tend to Arise

question 214

Multiple Choice

What are the major problems that will tend to arise if there are legal limits on the movement of prices?

• A)favoritism and corruption of officials and market participants 
• B)unenforceability of laws and higher costs of transactions 
• C)increasing restrictions to enforce the laws 
• D)misallocation of resources as prices no longer correspond to costs 
• E)All of the above are correct.

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Definitions:

User Cost

The cost of using a good or service, including the opportunity cost of forgone alternatives and the depreciation of the good's own value over time.

Government Regulation

The imposition of laws and rules by government aimed at affecting the behavior of individuals and industries to achieve societal goals.

Extraction Cost

The cost associated with the removal of raw materials from the earth, which can influence the price of goods.

Property Rights

Legal rights to possess, use, and dispose of assets including real property, intellectual property, and other possessions.