In response to a shortage caused by the imposition of a binding price ceiling on a market,
a. price will no longer be the mechanism that rations scarce resources.
b. long lines of buyers may develop.
c. sellers could ration the good or service according to their own personal biases.
d. All of the above are correct.
d
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If New England had a Gini coefficient of 0.32 and the Middle Colonies had a Gini coefficient of 0.65, which of the following would be most accurate?
a. The Middle Colonies would have a higher per capita income. b. The Middle Colonies would have a lower per capita income. c. The Middle Colonies would have greater income inequality. d. The Middle Colonies' income was growing faster.
Which of the following describes the vicious circle of poverty?
A. Government spending for public goods is inflationary and this undermines incentives to save and invest. B. Higher incomes increase consumption at the expense of capital accumulation, which causes income to fall. C. Low per capita incomes cause low levels of saving and investment, which mean low productivity and therefore low incomes. D. A growing national income increases the demand for money, which increases the interest rate and reduces investment.