Suppose a U.S. government program subsidizes the production of domestic sugar producers and places a tariff (tax) on the importation of sugar from other countries. This program
A) helps the producers of sugar, but increase the opportunity cost of obtaining it.
B) will reduce the opportunity cost of obtaining sugar and therefore lead to lower sugar prices.
C) creates wealth, because the government is providing the subsidies and imposing the tariffs.
D) promotes the production of goods that consumers value highly relative to cost.
A) helps the producers of sugar, but increase the opportunity cost of obtaining it.
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Which explains why supply curves slope upward to the right?
A) Sunk costs B) Decreasing average costs C) Increasing marginal costs D) Multiple per-unit costs
Refer to Figure 4-8. With rent control, the quantity supplied is 200 apartments. Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get. What is the highest rent they can get per month?
A) $1,000 B) $1,500 C) $2,000 D) $2,300
Which of the following is true of government purchases? a. Government purchases are independent of the price level
b. Government purchases are independent of the level of real GDP. c. Government purchases are independent of consumption. d. Government purchases are independent of investment. e. Government purchases are independent of the amount saved by households.
In the aggregate expenditures model, assume that the MPC is 0.75 . An increase in investment spending of $6 billion would produce an ultimate increase in real GDP of:
a. $0.25 billion. b. $0.75 billion. c. $12 billion. d. $24 billion.