When a Rent Ceiling Is ________,Consumer Surplus and Producer Surplus

question 181

Multiple Choice

When a rent ceiling is ________,consumer surplus and producer surplus shrink,a deadweight loss ________,and resources are lost in search activity and evading the rent ceiling law.

• A) inefficient; arises
• B) inefficient; disappears
• C) efficient; arises
• D) efficient; disappears
• E) nonexistent; arises

---

Definitions:

Efficiency Wages

A theory suggesting that higher wages can lead to increased productivity by improving worker morale, reducing turnover, and attracting more skilled employees.

Signaling Theory

A concept in economics and game theory that explores how parties communicate their quality or intent through decisions or actions that incur a cost or carry an inherent message.

Abelam People

An ethnic group living in the East Sepik province of Papua New Guinea, known for their elaborate yam festivals and ceremonial houses.

Spiritual Beliefs

Refers to the personal or communal systems of faith and worship, often relating to an understanding of the divine or transcendent aspects of reality.