A Subsidy Will Cause the Biggest Deadweight Loss When

question 31

Multiple Choice

A subsidy will cause the biggest deadweight loss when:

• A) both supply and demand are inelastic.
• B) supply is inelastic and demand is elastic.
• C) supply is elastic and demand is inelastic.
• D) both supply and demand are elastic.

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Definitions:

OCD

Obsessive-compulsive disorder, a mental disorder where individuals have recurring, unwanted thoughts and perform repetitive behaviors.

Psychiatric Disorder

A mental or behavioral pattern that causes significant distress or impairment of personal functioning.

Asperger Syndrome

A developmental disorder affecting ability to effectively socialize and communicate, part of the autism spectrum.

Autism

A developmental disorder that affects communication and behavior, characterized by challenges with social interaction and by repetitive and restricted patterns of behavior.