What is the impact of a government subsidy to producers?
A) Less is produced relative to the efficient level, creating a deadweight loss.
B) More is produced relative to the efficient level, creating a deadweight loss.
C) Producer surplus is increased, which creates a larger consumer surplus.
D) Producers are able to sell the product at a higher price.
E) Consumers must pay a higher price for the good.
B
You might also like to view...
Profit-maximizing firms enter a competitive market when existing firms in that market have
a. total revenues that exceed fixed costs. b. total revenues that exceed total variable costs. c. average total costs that exceed average revenue. d. average total costs less than market price.
When there are more qualified applicants than job openings, this indicates that the
A. Available jobs must be very desirable and pay high wages. B. Economy must be in a recession. C. Wages being offered are too high. D. Labor supply curve must be backward-bending.
Agriculture is an example of
A) perfect competition. B) oligopoly. C) monopoly. D) monopolistic competition.
Refer to the graph below, which shows a change in the demand for pounds from D to D'. Under a system of flexible exchange rates, the:
A. Price of a pound will increase to $3
B. Price of a dollar will increase to 3 pounds
C. Shortage equal to ab would be met using international monetary reserves
D. Payment deficit will cause changes in domestic price and income levels, shifting demand to the left, supply to the right, and reestablishing the original exchange rate