If a Good Is Subject to a Binding Price Ceiling

question 77

Multiple Choice

If a good is subject to a binding price ceiling and you purchase it on the black market,what do you expect to happen to the availability of the good over time?

• A) The availability of the good will rise over time as the supply curve becomes more elastic and the demand curve becomes more inelastic.(The shortage of the good will fall.)
• B) The availability of the good will fall over time as both the supply and demand curves become more elastic.(The shortage of the good will fall.)
• C) The availability of the good will fall over time as both the supply and demand curves become more elastic.(The shortage of the good will rise.)
• D) The availability of the good will rise over time as the demand curve becomes more elastic and the supply curve becomes more inelastic.(The shortage of the good will fall.)
• E) The availability of the good will not change over time.

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Definitions:

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Christopher Columbus, an Italian explorer who sailed across the Atlantic Ocean in 1492, credited with discovering the New World for Europe.

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The act of promoting or giving attention to an individual, cause, or product through various media outlets to influence public perception.

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A mistake in the determination, description, or representation of the Earth's surface or its features on a map.