Government contracts often pay on a cost-plus basis. The means the price the government pays to the producer is all costs of production plus "x" percent. Critics say this encourages firms to pad costs (e.g. hire more people than necessary at high salaries). This sounds like Question 38 options: a)market -- productive b)market--allocative c)government--productive d)government--allocative failure and is_ - inefficiency.

Government contracts often pay on a cost-plus basis. The means the price the government pays to the producer is all costs of production plus "x" percent. Critics say this encourages firms to pad costs (e.g. hire more people than necessary at high salaries). This sounds like Question 38 options: a)market -- productive b)market--allocative c)government--productive d)government--allocative failure and is_ - inefficiency.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter3: Economic Decision Makers

Section: Chapter Questions

Problem 16PAE

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