Refer to the above supply and demand graph. Point A represents the current equilibrium level of output of this product and point B represents the optimal level of output from society's perspective. If government decides to correct this spillover problem by subsidizing producers, then the:
A. demand curve will shift from D2 to D1.
B. supply curve will shift from S1 to S2.
C. supply curve will shift from S2 to S1.
D. demand curve will shift from D1 to D2.
Answer: B
You might also like to view...
The discount rate refers to the interest rate on
A) primary credit. B) secondary credit. C) seasonal credit. D) federal funds.
The Keynesian labor supply function is shown as
a. Ns = g(W/P). b. Ns = g(P/W). c. Ns = t(W/Pe). d. Ns = t(Pe/W).
The supply of loanable funds can decrease as international and domestic savers send their saving to other international markets
a. True b. False Indicate whether the statement is true or false
A technological advance that increases the marginal product of labor shifts the labor- ________ curve to the ________.
a. demand, left b. supply, left c. demand, right d. supply, right