The figure below illustrates the impact of an export subsidy as imposed by a large country. No imports are permitted.
The production effect of the export subsidy is shown by area(s)
A. (d + i + j).
B. d.
C. b.
D. (b + f + g).
Answer: B
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If the firm in the figure above is unregulated, it will produce
A) 5 units. B) 20 units. C) 30 units. D) 40 units.
Direct controls that impose equal percentage reductions in emissions on all firms in the area
a. impose the same costs on all firms. b. minimize the cost of pollution reduction. c. penalize firms that have already incurred some costs to reduce pollution. d. are the fairest way to distribute the burden
Economists generally prefer to deal with emissions of pollutants
A. with direct controls. B. by encouraging people not to pollute. C. by subsidizing the installation of pollution-control equipment. D. by taxing emissions.
Governments often ________ activities that generate external ________.
A. subsidize; benefits B. subsidize; costs C. simultaneously tax and subsidize; costs D. tax; benefits