Exhibit 4-3 P3 N Price of Good X 2 0 0 Quantity of Good X 8 Refer to Exhibit 4-3. If price P is a price ceiling, then there is a surplus in the market for good X the highest price that can legally be charged in this market is P3. the price at which exchange legally takes place is P. the price at which exchange legally takes place is P both a and Question 5 A society is productive inefficient when it produces at a point inside (below) its PPF. it does not produce the maximum output with its given resources and technology. it can produce more of one good without giving up some of another good. both a and b 0/4 pts all of the above Question 7 If the price elasticity of demand for a given product is 7, this means that the percentage change in quantity demanded is 7 times the percentage change in price. if quantity demanded fell by 1 percent, price would fall by 7 percent. 0/4 pts if price was raised 7 percent, quantity demanded would fall by 7 percent. if price was raised 7 percent, quantity demanded would rise 7 percent. none of the above