This topic contains a solution. Click here to go to the answer

Author Question: The two deadweight triangles are the Consumption distortion and Production distortion losses. It is ... (Read 157 times)

nevelica

  • Hero Member
  • *****
  • Posts: 563
The two deadweight triangles are the Consumption distortion and Production distortion losses. It is easy to understand why the Consumption distortion constitutes a loss for society.
 
  After all it raises the prices of goods to consumers, and even causes some consumers to drop out of the market altogether. It seems paradoxical that the Production distortion is considered an equivalent burden on society. After all, in this case, profits increase, and additional production (with its associated employment) comes on line. This would seem to be an offset rather than an addition to the burden or loss borne by society. Explain why the Production distortion is indeed a loss to society, and what is wrong with the logic that leads to the apparent paradox.

Question 2

Which of the currencies below does not serve a role as an international reserve currency?
 
  A) European euro
  B) Japanese yen
  C) U.S. dollar
  D) Mexican peso



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mmpiza

  • Sr. Member
  • ****
  • Posts: 354
Answer to Question 1

The Production Distortion represents an inefficient shift of society's resources to produce a good, which it could not sell profitably at world prices. Since (with full employment assumed) these resources were formerly used to produce export goods, which could compete profitably, the net result is a loss in real income to the country.

Answer to Question 2

D




nevelica

  • Member
  • Posts: 563
Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it


chereeb

  • Member
  • Posts: 326
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

There are major differences in the metabolism of morphine and the illegal drug heroin. Morphine mostly produces its CNS effects through m-receptors, and at k- and d-receptors. Heroin has a slight affinity for opiate receptors. Most of its actions are due to metabolism to active metabolites (6-acetylmorphine, morphine, and morphine-6-glucuronide).

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

Approximately 500,000 babies are born each year in the United States to teenage mothers.

Did you know?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

Asthma is the most common chronic childhood disease in the world. Most children who develop asthma have symptoms before they are 5 years old.

For a complete list of videos, visit our video library