Asked by
Saroj Saini
on Dec 04, 2024Verified
Which of the following policies could lead to a deadweight loss?
A) Price ceilings
B) Price floors
C) Policies prohibiting human cloning
D) all of the above
E) A and B only
Deadweight Loss
The loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved, leading to a loss of total welfare or economic surplus.
Price Ceilings
Regulatory measures that set a maximum price that can be charged for a product or service, intended to protect consumers from excessive pricing.
Price Floors
Legally established minimum prices for goods or services, aimed at preventing prices from falling too low, often used in agriculture.
- Gain insight into the financial impacts of public policy measures on markets, specifically with regards to setting price thresholds and offering price guarantees.
- Familiarize oneself with the notion of deadweight loss and its precipitating factors during market interventions.
Verified Answer
EG
Learning Objectives
- Gain insight into the financial impacts of public policy measures on markets, specifically with regards to setting price thresholds and offering price guarantees.
- Familiarize oneself with the notion of deadweight loss and its precipitating factors during market interventions.