When a Government Increases an Effective Price Ceiling for a Product

question 87

Multiple Choice

When a government increases an effective price ceiling for a product

• A) the shortage in the market will be reduced.
• B) the shortage in the market will be increased.
• C) the surplus in the market will be reduced.
• D) the surplus in the market will increase.

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Definitions:

Scientific Method

A systematic approach to research and experimentation that involves the formulation of a hypothesis, collection of data through observation and experimentation, and the formulation of conclusions based on the analysis of the data.

Cognitive Psychology

An area within psychology that explores cognitive functions such as perception, thought, memory, and learning in individuals.

Control Group

A group in an experiment that does not receive the treatment being tested and is used as a benchmark to measure how the other tested subjects do.

Experimental Group

The group in an experiment that receives the treatment or intervention being tested, as opposed to the control group which does not.