Suppose that the government mandates that a certain prescription medication cann

Question

Suppose that the government mandates that a certain prescription medication cannot be solid at a price higher than $5, as shown in the figure. Which area is the deadweight loss caused by this policy? Area E plus Area C Area B plus Area D There is no deadweight loss Area E plus Area D plus Area G None of the above Suppose you hear a politician state that society's goal should be to maximize total utility Which social welfare function could be best used to model the politician's thoughts? Rawlsian social welfare function Utilitarian social welfare function Samuelsonian social welfare function Pareto social welfare function None of the above Which of the following is defined as the private marginal cost to the producers plus any costs associated with the production of the good that are imposed on others but for which those others are not fully compensated? Deadweight loss Marginal damage Social marginal cost Private marginal cost Net social benefit

Explanation / Answer

10. b Area b plus Area d.

11.a Rawlsian social welfare function

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