Final answer:
The costs of quantity controls include deadweight loss (I) and inefficiency (II) because they result in a reduced total surplus of society and prevent optimal resource allocation. Limited quantity (III) is an effect, not a cost, and (IV) and (V) are intentions for imposing controls, not inherent costs.
Step-by-step explanation:
The question is asking which items are costs associated with quantity controls. To answer this, we have to first understand what deadweight loss and inefficiency due to quantity controls mean.An inefficient outcome is when the total surplus of society is reduced due to the economy producing at an inefficient quantity, which is known as deadweight loss.
This situation is similar to money that is wasted and benefits no one. For instance, when price controls prevent suppliers and demanders from engaging in transactions that both would be willing to make, both consumer and producer surplus could be higher without those controls.
This is an indication of inefficiency, as the optimal allocation of resources is not achieved. Therefore, the costs of quantity controls include deadweight loss (I) and inefficiency (II).In contrast, limited quantity (III) is not an inherent cost but a mechanism of the control, whereas attempts to protect parties involved (IV) and attempts to address temporary problems in markets (V) are intentions behind implementing quantity controls, but not direct costs of the controls themselves.