Refer to Excise Subsidy. Which areas count as part of the measure for both consumer's surplus and producer's surplus?
The following questions refer to the accompanying diagram which shows the effects of an excise subsidy given to firms. The initial price and quantity are P0 and Q0, respectively. After the subsidy is granted, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.
a. areas A, B, E and H.
b. areas B, E and F.
c. areas B and E.
d. no areas can count as part of the measure for both.
c. areas B and E.
You might also like to view...
Refer to the scenario above. Which of the following is true if David's maximum willingness to pay for the good falls to $380?
A) James will win the auction. B) Rachel will not take part in the auction. C) The owner of the good will earn the same average revenue. D) David will win the auction.
Refer to Figure 7-2. The tariff causes domestic consumption of coffee
A) to rise by 20 million pounds. B) to fall by 27 million pounds. C) to rise by 6 million pounds. D) to fall by 7 million pounds.
If the government desires to raise a certain amount of revenue by taxing a monopoly, an ad valorem tax will
A) generate the same loss of consumer surplus as a specific tax. B) generate a greater loss of consumer surplus than a specific tax. C) generate a smaller loss of consumer surplus than a specific tax. D) generate no loss of consumer surplus.
Which of the following was signed in the Kyoto Protocol?
A) the Framework Convention on Climate Change B) the Zero Greenhouse Gas Agreement C) the Treaty on Global Warming D) the Emission Trading Scheme