Discuss whether the imposition of maximum prices can improve the allocation of scarce resources. Give reasons why and why not.

Which of the following most appropriately illustrates the law of supply? Select one: a. corporation xyz has access to more labour resources so it increases production. b. because no choice tv is the only cable company, it can charge a relatively high price for its services. c. as the price of chicken wings rises, fred's bbq is willing to sell more chicken wings. d. as the price of automobiles increases, people are willing to buy fewer automobiles

Taxes adversely affect the allocation of resources in society because... A) The taxes collected are not enough to finance government spending B) they distort prices and thus the decisions of households and firms C) they do not always fall more heavily on the rich D) not everyone pays taxes Can you tell me what the correct answer is and explain why it is correct? I have no idea how taxes have any affect on the allocation of resources. Just so you know, this is a microeconomic course.

The 15,000 kidneys that are transplanted in the United States each year are received free from organ donors. Despite this, because of hospital fees, the average price of a kidney transplant is $250,000. As a result, only rich people or people with very good health insurance can afford the transplants. The government should put a ceiling of $100,000 on the price of kidney transplants. That way the middle-income people will be able to afford them, the demand for kidney transplants will increase and more kidney transplants will take place. Do you agree with the advocate's reasoning? Who gains (how much) and who loses (how much) from the price ceiling? Carefully Explain in terms of demand-and-supply analysis (a graph would help).