Which of the Following Is a Major Disadvantage of Setting

question 47

Multiple Choice

Which of the following is a major disadvantage of setting the price of a good below equilibrium and using waiting in line rather than price to ration the good?

• A) Compared to price rationing, waiting in line is unfair since it is easier for those with higher incomes to wait in line.
• B) Waiting in line imposes a cost on the consumer; paying higher prices does not.
• C) Both waiting in line and higher prices are costly to consumers, but unlike the payment of a higher price, waiting in line does not provide suppliers with an incentive to expand future output.
• D) Waiting in line benefits consumers at the expense of producers.

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Definitions:

Overjustification Effect

Occurs when an external incentive such as a reward, decreases a person's intrinsic motivation to perform a task.

Self-handicapping

Strategies people use to create obstacles and excuses for themselves so they can avoid blame for possible future failures.

Anticipatory Excuses

The justifications or reasons provided in advance to mitigate potential future blame or negative judgements.

Subsequent Performances

Refers to the performances or actions that follow an initial event or activity, often analysed to gauge improvement, decline, or consistency over time.