Economists Are Reluctant to State That Price Controls Are Desirable

question 33

Multiple Choice

Economists are reluctant to state that price controls are desirable or undesirable because

• A)it is impossible to evaluate the impact on quantity demanded and quantity supplied as a result of price controls.
• B)whether the gains from the winners exceed the losses from the losers is not strictly an economic question.
• C)sometimes price controls result in increases in economic efficiency and sometimes they result in decreases in economic efficiency.
• D)economists are reluctant to conduct positive analysis of price controls.

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Definitions:

Split-off

A point in the production process where multiple products are derived from a common input, and separate paths of further processing or sale are identified.

Avoidable Fixed Production Cost

Fixed costs that can be eliminated if a particular product, service, or segment is discontinued.

Surplus Material

Materials that exceed the requirements of the production process, often resulting in excess inventory.

Purchased Lots

Refers to the buying of assets or commodities in bulk quantities, often for manufacturing or resale purposes.