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For national security reasons a government decides that all of its base metal industry should not be located in the same geographical region, as it presently is. The government decides to allocate production quotas to firms in different parts of the country, but does not restrict in any way the transactions between consumers and base metal producers. This scheme is Select one: a. likely to be inefficient as the scheme will require subsidies to work. b. efficient as learning by doing effects will be strongest in the firms set up in new geographical regions. c. efficient as consumers still buy from whoever they like. d. likely to be inefficient as some of the industry's output is not produced by the firms with the lowest cost. e. efficient as those consumers who value base metals the most can purchase them.

For national security reasons a government decides that all of its base metal industry should not be located in the same geographical region, as it presently is. The government decides to allocate production quotas to firms in different parts of the country, but does not restrict in any way the transactions between consumers and base metal producers. This scheme is Select one: a. likely to be inefficient as the scheme will require subsidies to work. b. efficient as learning by doing effects will be strongest in the firms set up in new geographical regions. c. efficient as consumers still buy from whoever they like. d. likely to be inefficient as some of the industry's output is not produced by the firms with the lowest cost. e. efficient as those consumers who value base metals the most can purchase them.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Lesson 12 Question 2

For national security reasons a government decides that all of its base metal industry should not be located in the same geographical region, as it presently is. The government decides to allocate production quotas to firms in different parts of the country, but does not restrict in any way the transactions between consumers and base metal producers. This scheme is Select one: a. likely to be inefficient as the scheme will require subsidies to work. b. efficient as learning by doing effects will be strongest in the firms set up in new geographical regions. c. efficient as consumers still buy from whoever they like. d. likely to be inefficient as some of the industry's output is not produced by the firms with the lowest cost. e. efficient as those consumers who value base metals the most can purchase them.
Transcribed Image Text:For national security reasons a government decides that all of its base metal industry should not be located in the same geographical region, as it presently is. The government decides to allocate production quotas to firms in different parts of the country, but does not restrict in any way the transactions between consumers and base metal producers. This scheme is Select one: a. likely to be inefficient as the scheme will require subsidies to work. b. efficient as learning by doing effects will be strongest in the firms set up in new geographical regions. c. efficient as consumers still buy from whoever they like. d. likely to be inefficient as some of the industry's output is not produced by the firms with the lowest cost. e. efficient as those consumers who value base metals the most can purchase them.
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