Which of the following was an effect of the price ceiling placed on gasoline in the U.S. in the 1970s?
A) Car owners started buying luxury cars that were less fuel-efficient as the price of gas was very low.
B) Gas stations ran out of gas as the quantity of gas demanded exceeded the quantity supplied.
C) Those who valued gas the most were able to buy gas under the price ceiling.
D) The inventory of unsold gas increased and gas stations incurred losses.
B
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Which of the following statements is likely to be made by someone who believes in the new growth theory?
A) Population growth will limit long-run gains in real GDP per person. B) Competition will encourage discoveries of new ideas leading to greater economic growth. C) Choices made by human capital are likely to be inefficient. D) Economic growth will eventually slow. E) Although technological changes increase real GDP, these changes are random and unexplainable.
Suppose a person's utility for leisure (L) and consumption (Y) can be expressed as U = Y ? L and this person has no non-labor income
Assuming a wage rate of $10 per hour, show what happens to the person's labor supply when the person wins a lottery prize of $100 per day.