If a Good Is Subject to a Binding Price Ceiling

question 77

Multiple Choice

If a good is subject to a binding price ceiling and you purchase it on the black market,what do you expect to happen to the availability of the good over time?

• A) The availability of the good will rise over time as the supply curve becomes more elastic and the demand curve becomes more inelastic.(The shortage of the good will fall.)
• B) The availability of the good will fall over time as both the supply and demand curves become more elastic.(The shortage of the good will fall.)
• C) The availability of the good will fall over time as both the supply and demand curves become more elastic.(The shortage of the good will rise.)
• D) The availability of the good will rise over time as the demand curve becomes more elastic and the supply curve becomes more inelastic.(The shortage of the good will fall.)
• E) The availability of the good will not change over time.

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Definitions:

Arbitrator

A neutral third party who resolves disputes between two parties, especially in labor relations, by making binding decisions.

Concession Bargaining

A negotiation process where the union agrees to reduce benefits or alter conditions in exchange for something from the employer, often during economic difficulties.

Sequential Bargaining

a negotiation strategy where discussions and agreements on multiple issues occur in a specific sequence, rather than simultaneously.

Pattern Bargaining

A labor negotiation strategy where a union establishes contract terms with one employer and then seeks to apply those terms to negotiations with other employers in the same industry.