Final answer:
The statement 'Price ceilings result in resources being allocated to consumers' is partially true, as price ceilings transfer some producer surplus to consumers but also create shortages and inefficiencies.
Step-by-step explanation:
To determine whether the statement about price ceilings is true or false, we need to understand their effects on resource allocation. A price ceiling is a legal maximum on the price of a good or service, such as rent controls. Imposing a price ceiling below the equilibrium price causes the quantity demanded to exceed the quantity supplied (Qd > Qs), leading to a shortage. Consumers may favor price ceilings because they can transfer some producer surplus to consumers. However, this practice also results in deadweight loss due to the reduction in the number of market transactions.
Contrastingly, a price floor is a legal minimum on the price of a good or service. It can lead to a surplus where the quantity supplied exceeds the quantity demanded (Qs > Qd). Farmers may favor price floors, such as minimum price guarantees for crops because they can transfer some consumer surplus to producers. Both price floors and ceilings can lead to inefficiency by preventing the market from reaching its equilibrium and, consequently, reducing the social surplus.
Removing these barriers allows prices and quantities to adjust to their natural equilibrium level, thereby increasing the economy's social surplus and efficiency. Therefore, the statement 'Price ceilings result in resources being allocated to [consumers]' could be considered partially true; while they do transfer some producer surplus to consumers, they also create inefficiencies and shortages.