Table 6-1 -Refer to Table 6-1.Which of the Following Price Ceilings Would

question 241

Multiple Choice

Table 6-1

-Refer to Table 6-1.Which of the following price ceilings would be binding in this market?

• A) $2
• B) $3
• C) $4
• D) $5

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Definitions:

Francs

A former currency of France, which was replaced by the Euro.

Consumption

The act of utilizing economic goods to satisfy needs or desires.

Revealed Preferred

A theory in economics that preferences of consumers can be understood from their purchasing habits and choices, as observed from actual market behavior.

WARP

The Weak Axiom of Revealed Preference, a concept in microeconomics that asserts if a consumer prefers bundle A over bundle B when both are affordable, then the consumer will not choose B over A when B's price decreases making it more affordable.