ECONOMICS
PRICE CEILINGS AND FLOORS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If a government decided to impose price controls on gasoline, what could it do to avoid the time wasted waiting in lines? Though there are several solutions to this problem, only one of the options below is correct.
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Restrict gasoline consumption to high-value uses.
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Ban lines for gasoline.
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Create gasoline rations.
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Ban black markets for gasoline.
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Explanation:
Detailed explanation-1: -If a government decided to impose price controls on gasoline, what could it do to avoid the time wasted waiting in lines? Though there are several solutions to this problem, only one of the options below is correct. Restrict gasoline consumption to high-value uses.
Detailed explanation-2: -Economists generally oppose most price controls, believing that they produce costly shortages and gluts.
Detailed explanation-3: -Price controls are commonly imposed on consumer staples. These are essential items, such as food or energy products. For instance, prices were capped for things like rent and gasoline in the United States. Controls set by the government may impose minimums or maximums.
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