If the Equilibrium Price of Good X Is $5 and a Price

question 126

Multiple Choice

If the equilibrium price of good X is $5 and a price ceiling is imposed at $4, the result will be a(n) :

• A) accumulation of inventories of unsold gas.
• B) shortage.
• C) surplus.
• D) quantity supplied that exceeds the quantity demanded.

---

Definitions:

Ability-To-Pay

A tax principle that holds that taxes should be levied on individuals based on their capacity to pay, typically reflected in their income or wealth levels.

Ability-To-Pay Principle

The principle of tax fairness by which those with greater ability to pay a tax should pay more tax.

Ability-To-Pay

A concept in taxation that taxes should be levied according to an individual or entity’s ability to shoulder the tax burden.

Lump-Sum Tax

A tax that is the same for everyone, regardless of any actions people take.