The above figure shows the domestic market for tomatoes. Suppose this market is isolated from global competition and there is a support price set at $16. In this figure, what area equals the total subsidy paid to tomato farmers?
A) area E
B) area B + area C + area D + area F
C) area C + area D + area E + area G
D) area A
E) area F
C
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The higher the nominal interest rate, the
A) greater the opportunity cost of holding money. B) lower the quantity of money demanded. C) more the demand for money curve shifts leftward. D) Both answers A and B are correct.
John takes 10 minutes to iron a shirt and 20 minutes to type a paper. Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper. Which of the following statements is correct?
a. Harry has a comparative advantage in ironing. b. Harry has a comparative advantage in typing. c. Harry has an absolute advantage in typing. d. Harry has an absolute advantage in ironing. e. Neither can gain from specialization and exchange.
Cross-price elasticity of demand is used to determine whether
a. a product is an inferior or normal good b. a product is a necessity or a luxury c. two products are substitutes or complements d. price and total revenue are directly or inversely related e. the product's demand curve is linear
The nice thing about a pollution tax is that it
a. eliminates pollution b. forces cleanup to occur c. is imposed only on the market with the externality d. creates new property rights e. creates positive externalities to compenstate for negative externalities