Effective Price Ceilings Cause Misallocation of Resources Because Scarce Resources

question 140

True/False

Effective price ceilings cause misallocation of resources because scarce resources are usually not allocated to their highest-value uses.

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Definitions:

Standard of Living

A measure of the wealth, comfort, material goods, and necessities available to a certain socioeconomic class in a certain geographic area.

Equal Distribution

The equitable allocation of resources, income, or assets among all members of a society or group.

Income

The total money received by an individual or household over a specified time period, including wages, salaries, benefits, and other earnings.

Positive Economic Statement

An objective statement based on facts that can be tested or validated, focusing on descriptions of what is rather than what ought to be.