The above figure shows supply and demand curves for milk. In an effort to help farmers, the government passes a law that establishes a $3 per gallon price support. The loss in social welfare resulting from this price support equals
A) k + i.
B) j.
C) [$3 ? (Q2 - Q1)] - h.
D) $3 ? k.
C
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Consumer surplus exists when
A) it costs less to produce goods than buyers must pay for them. B) consumers value the good more highly than what they must pay to buy it. C) taxes on goods are less than the appropriate amount. D) the marginal benefit of the good is always equal to or less than the price of the good. E) the price of the good is greater than the marginal cost of producing a unit of the good.
Free trade ________ living standards by ________ economic efficiency
A) lowers; eliminating B) raises; equalizing C) lowers; decreasing D) raises; increasing
Primary credit extended by the Fed is:
A. the highest interest rate loans offered by the Fed. B. loans offered at the prime interest rate for periods exceeding thirty days but less than one year. C. for banks needing long-term loans to work out financial problems. D. short-term, usually overnight loans.
Consider the demand function Qd = 150 - 2P. The effects of other determinants of Qd is reflected in
A) the intercept of the function. B) the slope of the function. C) neither the slope nor the intercept of the function. D) in both the slope and the intercept of the function.