In the above figure, if the production of gloves was restricted to 2,000 a day, then the deadweight loss would equal
A) $0, because 2,000 gloves per day is an efficient quantity of gloves to produce.
B) $2,000.
C) $5,000.
D) $10,000.
C
You might also like to view...
Advertising provides consumers with information about the underlying existence or quality of a product. These types of advertising messages are called
A. green advertising. B. influential advertising. C. persuasive advertising. D. informative advertising.
High inflation can do which of the following?
A) increase shoeleather costs B) distort consumption choices C) arbitrarily redistribute income D) all of the above
The greater the magnitude of the external benefits of production, a. The larger is the deadweight loss from underproduction
b. The greater would be the optimal subsidy. c. The further the private market solution ignoring those benefits would deviate from the socially efficient level of output. d. All of the above are true
In an effort to prepare for war, the Defense Department is required by Congress to stockpile helium, once used to provide lift for blimps (phased out in the 1960s). About 100 years of total U.S. usage of helium is in storage. The Pentagon agrees to buy helium from producers at a price above what would otherwise prevail in the marketplace. Is this likely to result in efficiency? Explain.
What will be an ideal response?