Which of the following statements is true?

a

Allocative efficiencyrefers to the production of the combination of goods that are most valued by society.

b

Therationing function of pricesrefers to the ability of the competitive market forces of demand and supply to determine a price (the equilibrium price) at which selling and buying decisions are consistent.

c

A price ceilingis a government-imposed minimum price in a market.

d

All of the above.

e

Only a) and b)

Question 36(1 point)

Which of the following statements is true?

a

Price ceilings are set on goods that are considered to be necessities; the current equilibrium price is "so high" that many people are unable to purchase the item.

b

A price ceiling creates ashortage(an excess demand that cannot be eliminated by an increase in the price of the good).

c

Black markets are markets in which illegal activities are pursued.

d

All of the above.

e

Only a) and b)

Question 37(1 point)

Which of the following statements is true?

a

A good example of a price ceiling is rent control.

b

Aprice flooris a government-imposed maximum price in a market.

c

Price floors are set on goods whose producers need some special support (such as farmers, who face a lot of price volatility); the current equilibrium price is "so low" that many producers may go bankrupt.

d

All of the above.

e

Only a) and c)