Prohibiting Price Increases in Situations of True Scarcity Could Best

question 155

Multiple Choice

Prohibiting price increases in situations of true scarcity could best be described as

• A)interfering with the "law" of supply and demand.
• B)thwarting the "law" of increasing returns to scale.
• C)violating the "law" of increasing cost.
• D)interfering with the "law" of diminishing marginal utility.

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Definitions:

Panama

A country in Central America, located at the junction of North and South America, known for the Panama Canal which connects the Atlantic and Pacific Oceans.

Stagflation

An economic condition characterized by slow economic growth and high unemployment coupled with high inflation.

Economic Stagnation

A prolonged period of little or no growth in the economy, characterized by high unemployment, stagnant wages, and low levels of investment and consumer spending.

Unemployment

The condition of not having a job despite actively seeking work, often used as an economic indicator reflecting the health of an economy.