Scenario: the Table Below Shows the Reservation Values of Ten

question 160

Multiple Choice

Scenario: The table below shows the reservation values of ten buyers and a seller for a loaf of bread. Each buyer would buy at most one loaf and the seller can make up to ten loaves. Initially trades happen under the market mechanism with each agent making a decision according to the market price and his or her own reservation value. Then the government imposes a price ceiling of $1.00 per unit.

-Refer to the scenario above.After the price ceiling is imposed,there will be a deadweight loss of ________.

• A) $0.00
• B) $1.00
• C) $2.00
• D) $3.00

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Definitions:

George III

King of Great Britain and Ireland during the late 18th century, whose reign saw the American Revolution and the loss of the American colonies.

Colonial Reforms

Policies and changes implemented by colonial powers intended to improve administration, economic performance, and social conditions within their colonies.

British Prosperity

A period or condition marked by economic growth and well-being within the United Kingdom, historically influenced by factors such as industrialization, empire, and global trade.

Quaker Merchants

Businesspeople who adhered to the Religious Society of Friends, or Quakers, known for their ethical business practices and emphasis on peace and equality.