Suppose That in an Effort to Help Single Parents, the Government

question 49

Multiple Choice

Suppose that in an effort to help single parents, the government decides to pay part of the cost of childcare. This measure would increase ________ in the market for childcare.

• A)efficiency
• B)consumer surplus
• C)total economic surplus
• D)producer surplus

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Definitions:

Diagram (A)

A graphical representation or chart designed to illustrate or explain concepts, processes, or data.

Allocative Inefficiency

A situation in which resources are not distributed optimally among producers or consumers, leading to a loss in economic efficiency.

Profit-Maximizing Output

The point of production where a company reaches its maximum profit, occurring when marginal cost is equal to marginal revenue.

Marginal Cost

The bump in expenditure for manufacturing an additional unit of a product or service.