If Government Imposes a Price Ceiling on a Good That

question 44

Multiple Choice

If government imposes a price ceiling on a good that is below the market equilibrium price

• A)a surplus will develop.
• B)a shortage will develop.
• C)producers will reduce their sales price.
• D)consumers will reduce their demand for the good.

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Definitions:

In-Kind Transfers

Transfers of goods or services from one party to another as a form of payment or aid, rather than transferring cash.

Economic Pie

A metaphorical representation of a nation's total economic output, suggesting how much wealth is available for distribution among its population.

Same Income

A situation where two or more individuals or entities earn an identical amount of money over a given period.

Poverty Threshold

The minimum income level deemed necessary to achieve an adequate standard of living in a given country or region.