1. If the government were to implement a law that holds the price of gasoline below the market price. say 2 per gallon, what would the result likely be? A. Deflation B. Additional inflation C. Shortages of gasoline and long lines D. Surpluses of gasoline and short lines

The correct answer is C. Shortages of gasoline and long lines.<br /><br />When the government sets a price ceiling below the market price, it creates a situation where the quantity demanded of gasoline exceeds the quantity supplied. This is because consumers are willing to pay more than the capped price, but producers are not willing to supply enough gasoline at that lower price. As a result, there will be shortages of gasoline and long lines as consumers compete for the limited available supply.