The Presence of Price Controls in a Market Usually Is

question 188

Multiple Choice

The presence of price controls in a market usually is an indication that

• A) an insufficient quantity of a good or service was being produced in that market to meet the public's need.
• B) the usual forces of supply and demand were not able to establish an equilibrium price in that market.
• C) policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers.
• D) policymakers correctly believed that, in that market, price controls would generate no inequities of their own.

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Definitions:

Direct Materials

Basic substances that can be directly linked to the production process of a product.

Direct Labor Costs

The expenses associated with the wages of employees who are directly involved in the production or manufacturing of goods or services.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders based on a projected activity level.

General Ledger

The main accounting record of a company that uses double-entry bookkeeping, containing all the financial accounts and statements.