The Costs Involved with Breaking a Ban Placed on a Good

question 44

Multiple Choice

The costs involved with breaking a ban placed on a good depend on all of these except the:

• A) punishment associated with rule breaking.
• B) likelihood of being caught.
• C) likelihood of being punished if caught.
• D) ability of the public or individuals to pay for those costs.

---

Definitions:

Equilibrium Price

The price at which the quantity of a good demanded by consumers matches the quantity supplied by producers, resulting in market stability.

Price Ceiling

A legal maximum price set by a government on certain goods and services, above which they cannot be sold.

Supply and Demand

A fundamental economic model that describes how prices and quantities of goods and services are determined in a market.

Price Ceiling

A maximum legal price that can be charged for a product or service, above which it cannot rise.