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:

Innate Phobias

Pre-programmed fears that are believed to be evolutionary acquired and common across individuals, such as fear of snakes or heights.

Blood-injection-injury Phobia

An intense, irrational fear of blood, injury, or the possibility of receiving an injection, often leading to avoidance behavior and sometimes fainting.

Situational Phobia

A type of anxiety disorder characterized by an irrational fear of specific situations, such as flying, heights, or enclosed spaces.

Social Phobia

Severe worry or dread about being negatively assessed, criticized, or spurned in a social setting or when performing.