209k views
5 votes
Which of the following is an example of a price ceiling? Multiple Choice

A. Limits on interest rates charged by credit card companies.
B. Minimum-wage laws for unskilled workers
C. Subsidies for apartment rent in mojor cities.
D. Price supports for agricultural products

User Aks
by
7.7k points

1 Answer

5 votes

Final answer:

The correct answer is 'A. Limits on interest rates charged by credit card companies' because it refers to setting a maximum interest rate, which aligns with the concept of a price ceiling.

Step-by-step explanation:

A price ceiling is a legal maximum on the price that can be charged for a product or service, imposed by a government to keep essential goods and services affordable for consumers. Among the multiple-choice options provided, 'A. Limits on interest rates charged by credit card companies' is an example of a price ceiling because it sets a maximum interest rate that can be charged, which is similar to setting limits on financial market prices like credit card interest rates through usury laws. This is the only option that explicitly mentions a cap on the price or cost to consumers, which aligns with the definition of a price ceiling.

Conversely, 'B. Minimum-wage laws for unskilled workers' is an example of a price floor because it sets a minimum price for labor rather than a maximum. 'C. Subsidies for apartment rent in major cities' involve government payments that help lower the cost of rent but do not set a legal maximum rent price. Finally, 'D. Price supports for agricultural products' indicate a price floor where the government ensures farmers receive a minimum price for their goods.

User Edimshuffling
by
8.2k points