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

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Definitions:

Rent-Seeking Behavior

Activities aimed at increasing one’s share of existing wealth without creating new wealth, often through manipulation or exploitation of the political environment.

Subsidized Loan Program

A financial aid program where the government or an organization offers loans at reduced interest rates or with favorable terms to support certain activities or sectors.

Angora Goat Farmers

Individuals or businesses involved in raising Angora goats, which are prized for their soft wool or mohair.

Special-Interest Effect

A phenomenon where policy decisions are disproportionately influenced by small, well-organized groups at the expense of the larger public interest.