How does the deadweight loss occur in a deficiency payment program?


The deadweight loss occurs because the program increases the output beyond the efficient level of output. From the efficient level of output to the new level of output, the marginal cost to sellers for producing the good is greater than the marginal benefit to consumers.

Economics

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The fraction of deposits that banks are required to keep is known as the

A) discount rate. B) required reserve ratio. C) deposit multiplier. D) money multiplier.

Economics

In a perfectly competitive resource market the Marginal Revenue Product Curve is

A) vertical. B) horizontal. C) downward-sloping. D) upward-sloping.

Economics

Timber producers destroy many acres of rainforests every year. To prevent deforestation, the government imposed a quota on the number of trees that were cut by the timber producers. The quota was imposed by the government to prevent _____

a. the free rider problem b. the tragedy of the commons c. asymmetric information d. deadweight loss

Economics

Which statement is true?

A. There were no recessions during the 1980s. B. The 1920s was not a prosperous decade. C. The federal government played a significant role during Dwight Eisenhower's presidency. D. The longest recession since World War II began in 1990.

Economics