Which of the Following Best Represents the Misallocation of Resources

question 38

Multiple Choice

Which of the following best represents the misallocation of resources that would occur under a price ceiling on bottled water following a major hurricane?

• A) Bottles of water sit on the shelves because nobody can afford it.
• B) A family in a distant state takes time off work to bring bottled water to the hurricane-ravaged area.
• C) A family in a distant state gives bottled water to its dog, but a family in the hurricane area cannot find bottled water to drink.
• D) Families in the hurricane area brush their teeth with bottled water but cannot find enough to drink.

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The total cost of production divided by the number of units produced, providing a per-unit cost figure.

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A specific group of first-year students at San Jose State University.