Which of the Following Is True

question 151

Multiple Choice

Which of the following is true?
i.A price support is inefficient.
ii.A price floor set above the equilibrium price creates a surplus.
iii.A price ceiling set above the equilibrium price creates a black market.

• A) Only i
• B) Only ii
• C) Only iii
• D) i and ii
• E) ii and iii

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Definitions:

Consumer Price Index

An evaluative measure that calculates the weighted mean cost of a range of consumer services and goods, from food to medical care and transportation.

Purchasing Power

The real value of money, reflecting the quantity of goods or services that one unit of money can buy, inversely related to the level of prices in the economy.

Producer Price Index

An economic measure reflecting the average rate of change in the prices at which domestic producers sell their goods over time.

Consumer Price Index

A tool that analyzes the weighted mean prices for an assortment of consumer necessities, such as healthcare, transportation, and food items.