Microeconomics helps explain economic fluctuations, why the economy shrinks and expands and why some of the economy's resources are idle.

A deadweight loss

A) is possible only if the good is underproduced but is not possible if the good is overproduced. B) subtracts only from producer surplus. C) is a loss to consumers and a gain to producers. D) is a loss inflicted on the entire society.

A physicians' professional association supports legislation seeking higher quality medical care. According to the special interest theory of regulation, who likely will benefit most from this legislation?

a. Government, through decreased regulation of physician quality. b. Patients, through reduced prices for medical care. c. Physicians, through increased prices for medical care. d. Hospitals, through decreased for physicians' services. e. Government, since higher quality health care is clearly in the public interest.