The deadweight loss associated with producing a product that has an external cost occurs because
A) too much output is produced.
B) too little output is produced.
C) the price that firms charge for the good is too high.
D) not enough resources are allocated to producing the good.
E) the marginal social cost does not equal zero.
A
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Vertical restraints in a contract
A) are generally illegal in the U.S. B) usually benefit the firm that produces the raw inputs to the production process. C) are used in vertical mergers. D) can approximate the outcome of a vertical merger.
Which of the following is not considered an automatic stabilizer?
a. Food stamp program for people with low incomes b. Welfare program for families with dependent children c. Medicaid, a health program for the poor d. Financial assistance for disabled people e. Unemployment programs that pay benefits to those who lose their jobs