When the federal government installs a price support program that requires the government to purchase all of a good not bought in the private economy at the support price, the impact on total welfare is the
A) change in consumer surplus.
B) change in consumer surplus + the change in producer surplus + the cost to government.
C) change in consumer surplus + the change in producer surplus - the cost to government.
D) change in consumer surplus + the change in producer surplus.
C
You might also like to view...
Two brands of water, Natural Water and Mountain Water, are close substitutes. If the price of Mountain Water decreases, the fall in price
A) shifts the demand curve for Natural Water rightward. B) shifts the demand curve for Natural Water leftward. C) increases the price of Natural Water. D) increases the demand for Mountain Water. E) More information is needed to determine if the demand curve for Natural Water shifts rightward or leftward.
The table above shows the amounts of cloth and cheese that China and Pakistan can produce in an hour. Which country has the comparative advantage in cloth and which country has the comparative advantage in cheese?
What will be an ideal response?
"In the past five years the average price of our Chevrolets has risen about 6 percent a year, and each year we have sold 10 percent more cars than the previous year." How can this car dealer sell more cars as the price of the cars increases?
What will be an ideal response?
In the late 18th century, England:
a. passed laws prohibiting the export of new industrial machinery. b. tried to discourage labor pirating. c. was the second largest producer of manufactured goods in the world. d. successfully prevented technology transfer to the U.S. e. Both a and b are correct.