Use the following to answer question :
-Hugo Chávez was the president of Venezuela.Venezuela is a major producer of oil products,which remain a critical component of Venezuela's economy.Suppose that President Chávez wanted to increase his popularity with the citizens of Venezuela and enacted a government policy to reduce the price of gasoline sold at state-owned gas stations to 50% of the previous price.This policy is called a:
A) laissez-faire policy.
B) price floor.
C) price ceiling.
D) quota.

Question

Use the following to answer question : 
-Hugo Chávez was the president of Venezuela.Venezuela is a major producer of oil products,which remain a critical component of Venezuela's economy.Suppose that President Chávez wanted to increase his popularity with the citizens of Venezuela and enacted a government policy to reduce the price of gasoline sold at state-owned gas stations to 50% of the previous price.This policy is called a:
A) laissez-faire policy. 
B) price floor. 
C) price ceiling. 
D) quota.

Quizplus · Accepted Answer

A price ceiling is a government-imposed limit on the price of a good or service, and this policy of reducing the price of gasoline sold at state-owned gas stations to 50% of the previous price is an example of a price ceiling. The intention is to increase the popularity of the president among citizens by making gasoline more affordable. A laissez-faire policy is a hands-off approach where the government allows the market to operate freely without any government intervention. A price floor is a government-imposed minimum price below which a good or service cannot be sold. A quota is a limit on the quantity of a good or service that can be produced or sold.

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