Refer to Excise Subsidy. The deadweight loss created by the subsidy is represented by

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. area F + G.

b. area D + G + J.

c. area C.

d. area D.


d. area D.

Economics

You might also like to view...

Patrick lives near two gas stations, Exxon and Shell. If Exxon decreases the price of gas, we predict that the quantity of gasoline demanded at Shell will

A) decrease because Exxon and Shell gas are complements. B) decrease because Exxon and Shell gas are substitutes. C) increase because Exxon and Shell gas are substitutes. D) increase because Exxon and Shell gas are complements. E) not change Exxon and Shell are different brands of gasoline.

Economics

Lily has $10 to spend each week on fish and chicken. Fish costs $2 a serving and chicken costs $3 a serving. The table shows Lily's marginal utilities of fish and chicken. Lily will consume ________ servings of chicken and ________ of fish each week

A) 4; 0 B) 1; 3 C) 0; 5 D) 2; 2

Economics

When both worker productivity and the price of the output being produced increase in an LDC, we can expect labor

a. demand to increase b. demand to decrease c. supply to increase d. supply to decrease e. supply and demand to shift out to the right

Economics

Durable goods, nondurable goods, and services are part of __________ and fall in the category of ________

a. GDP; personal consumption b. GDP; gross private domestic investment c. GDP; government purchases d. national income; inventory e. national income; employee compensation

Economics