Mortimer Loves Sushi

question 75

Multiple Choice

Mortimer loves sushi.He loves sushi so much that he asks his congressional representative to work for passage of a binding price ceiling law.Who would be affected by this law and how?

• A) Sellers would benefit from such a law because they would receive a higher price for their products.
• B) Consumers would benefit from such a law because prices would be lower and all would be able to purchase sushi cheaply.
• C) Consumers would benefit from such a law because the sushi would be made of higher-quality fish,and each serving would be larger than it had been with no binding price ceiling in place.
• D) Some consumers would benefit from such a law because prices for sushi would be lower for those able to buy it in the legal market.
• E) Sellers would benefit from such a law because they would be able to sell higher-quality sushi and thus capture a larger share of the market.

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Definitions:

Overapplied Overhead

A situation where the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company.

Direct Materials Cost

The total expense incurred for the raw materials that are directly utilized in the making of a product.

Work in Process

Inventory category that includes goods that are in the production process but are not yet complete.