Figure 6-7 -Refer to Figure 6-7.Which of the Following Price Controls Would

question 198

Multiple Choice

Figure 6-7
-Refer to Figure 6-7.Which of the following price controls would cause a shortage of 20 units of the good?

• A)a price ceiling set at $6
• B)a price ceiling set at $5
• C)a price floor set at $9
• D)a price floor set at $8

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Definitions:

Consumption

The use of goods and services by households or individuals, which is a primary component of economic activity.

Income

The cash flow generated out of work or investments, typically on a steady basis.

Utility Function

A mathematical representation of a consumer's preference ranking over bundles of goods, showing the level of satisfaction or utility derived.

Commodity

A basic good used in commerce that is interchangeable with other goods of the same type; commodities are often used as inputs in the production of other goods or services.