With Reference to the Graph Above,if the Intended Aim of the Price

question 32

Multiple Choice

With reference to the graph above,if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers,then normative analysis would conclude that:

• A) the policy was effective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
• B) the policy was ineffective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
• C) the policy was effective, since surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices.
• D) there is no "right" conclusion to be reached (in a normative sense), since people have different opinions concerning what constitutes a better outcome.

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Definitions:

Emotional Distress

A legal term describing significant mental suffering or anguish inflicted upon a person through wrongful actions by another, which may be grounds for a lawsuit.

Due Care

The effort made by an ordinarily prudent or reasonable party to avoid harm to another party.

Negligence

The failure to exercise a level of care that a reasonably prudent person would in similar circumstances, leading to unintended harm or damage.

Proximate Cause

A legal term referring to an event sufficiently related to an injury that the law considers the event to be the cause of that injury.