Use the Following to Answer Questions

question 81

Multiple Choice

Use the following to answer questions:
Figure: Costs of Price Ceilings
-(Figure: Costs of Price Ceilings) Refer to the figure. What is the dollar amount of lost consumer surplus if a price ceiling of $4 is implemented?

• A) $20
• B) $10
• C) $90
• D) $80

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Definitions:

Actual Output

The real quantity of goods and services produced by an economy or firm at a given period, regardless of capacity.

Nominal GDP

The overall economic output of a country, consisting of all final goods and services produced in a defined period, assessed at prevailing market prices without correction for inflation.

Short-Run Aggregate Supply Curve

The short-run aggregate supply curve represents the relationship between the total supply of goods and services that firms in an economy are willing to produce and sell at different price levels, over a short period.

Recessionary Gap

A situation where an economy's real GDP is lower than its potential GDP, indicating underutilized resources and economic slack.