The Presence of a Price Control in a Market for a Good

question 130

Multiple Choice

The presence of a price control in a market for a good or service usually is an indication that

• A)an insufficient quantity of the 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 price controls would generate no inequities of their own once imposed.

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Definitions:

Standard Deviation

A statistic that measures the dispersion or variability of a dataset or investment returns relative to its mean.

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase an asset at a specified price within a certain timeframe.

Strike Price

This is the fixed price at which the owner of an option can purchase (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Standard Deviation

A statistical measurement of the dispersion or variation in a set of values, indicating how much individual data points differ from the mean.