Price Controls on Gasoline

question 40

Multiple Choice

Price controls on gasoline

• A)increase consumer surplus.
• B)create a shortage of gasoline.
• C)create a surplus of gasoline.
• D)increase producer surplus for all producers.

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Definitions:

Financial Leverage

The use of borrowed money (debt) to amplify the potential returns from an investment.

EBIT-EPS Analysis

A tool used to determine the impact of different levels of debt on a company's earnings before interest and tax (EBIT) and earnings per share (EPS).

Leverage

The use of borrowed funds to finance the purchase of assets or increase the potential return of an investment.

Management Effectiveness

A measure of how well a company's management team utilizes resources to generate profits.