When Prices Are Used as a Rationing Device, Goods That

question 6

Multiple Choice

When prices are used as a rationing device, goods that are relatively more scarce than they used to be will have

• A) greater demand.
• B) lower excess demands.
• C) higher prices.
• D) long queues.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed on their income or profits.

After-Tax Net Income

The amount of profit left after all taxes have been deducted from total revenue.

Payback Period

The length of time it takes for an investment to recover its initial cost, used in capital budgeting to assess investment viability.

After-Tax Net Income

The amount of profit a company has left after paying all its taxes.