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If the Intended Aim of the Price Ceiling Set at $6

Question 52

Multiple Choice

  If the intended aim of the price ceiling set at $6, as shown in the graph, was a net increase in the well-being of consumers, then positive analysis would conclude that the policy was: A)  effective because the surplus gained by consumers through lower prices is greater than the surplus they lost due to fewer transactions taking place. B)  ineffective because the surplus gained by consumers through lower prices is less than the surplus they lost due to fewer transactions taking place. C)  effective because the surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices. D)  ineffective because the amount of deadweight loss is greater than the surplus gained by consumers from lower prices. If the intended aim of the price ceiling set at $6, as shown in the graph, was a net increase in the well-being of consumers, then positive analysis would conclude that the policy was:


A) effective because the surplus gained by consumers through lower prices is greater than the surplus they lost due to fewer transactions taking place.
B) ineffective because the surplus gained by consumers through lower prices is less than the surplus they lost due to fewer transactions taking place.
C) effective because the surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices.
D) ineffective because the amount of deadweight loss is greater than the surplus gained by consumers from lower prices.

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