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Question
Katherine is the president of the United States. In an attempt to make gasoline prices cheaper, she has imposed a binding price ceiling on gas. What would she expect her critics to say?
a. The binding price ceiling will encourage oil companies to deplete the resource too quickly.
b. The binding price ceiling will discourage individuals from using their personal automobiles to commute to work or school.
c. The binding price ceiling will cause firms to minimize their spending on the research and development of alternatives to gasoline.
d. The binding price ceiling will increase the likelihood that customers obtain needed gasoline on the black market.
e. The binding price ceiling will cause firms to produce only gasoline of the highest quality.
Answer
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