Price Controls Will Tend to Cause Misallocation of Resources Because

question 19

Multiple Choice

Price controls will tend to cause misallocation of resources because

• A) production (or opportunity) cost no longer corresponds to market price.
• B) people are unable to determine their preferences at the high or low price.
• C) producers no longer have incentive to be profitable.
• D) consumers no longer have incentive to spend their income efficiently.

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Definitions:

Incorporation Process

The series of legal steps taken to form a corporate entity or company which is recognized by law as a separate legal entity from its owners.

Majority Vote

A voting requirement where more than half of the votes cast by individuals entitled to vote are needed to make a decision or pass a resolution.

Shareholders

Individuals or entities that own shares in a corporation, giving them the right to vote on corporate matters and receive dividends.

Director Serve

The role or term during which an individual serves on a board of directors for an organization or corporation.