Effective Price Ceilings and Price Floors

question 160

Multiple Choice

Effective price ceilings and price floors:

• A) cause surpluses and shortages,respectively.
• B) make the rationing function of free markets more efficient.
• C) interfere with the rationing function of prices.
• D) shift demand and supply curves and therefore have no effect on the rationing function of prices.

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Definitions:

Prototype Matching

Prototype matching is a cognitive process for categorization where new stimuli are compared to an idealized or average representation (prototype) of a category to determine belonging.

Top-Down Processing

A cognitive process in which the brain utilizes previously held knowledge and expectations to interpret and perceive new information.

Retinal Image

The image projected on the retina of the eye, where light-sensitive cells convert it into neural signals for processing by the brain.

Size Constancy

The perceptual stabilization of the size of objects as seen from varying distances, despite the changes in the size of the image on the retina.