The Government Decides to Impose a Price Ceiling on a Good

question 128

Multiple Choice

The government decides to impose a price ceiling on a good because it thinks that the market-determined price is too high.If it imposes the price ceiling above the equilibrium price:

• A) consumers will respond to the higher price and therefore wish to purchase less of the good than at the equilibrium price.
• B) producers will respond to the higher price and therefore offer fewer units for sale.
• C) consumers will purchase less of the good after the price ceiling is imposed.
• D) neither producers nor consumers will change their behaviour.

---

Definitions:

Linguistic Determinism

Theory that describes how the use of language determines or influences thoughts and perceptions.

Sapir-Whorf Hypothesis

Based on the principles of linguistic determinism and linguistic relativity, the hypothesis that language shapes our thoughts and culture, and our culture and thoughts affect the language we use to describe our world.

Linguistic Relativity

Theory that each language includes some unique features that are not found in other languages.

Malapropism

The mistaken use of a word in place of a similar-sounding one, often with unintentionally amusing effect.