The figure below represents the domestic market for wheat in a small country. Imports of wheat are prohibited.
With an export subsidy of $20 per bushel, the consumption effect of the export subsidy amounts to
A. $300 million.
B. $200 million.
C. $2.2 billion.
D. $1 billion.
Answer: B
You might also like to view...
The above figure shows the marginal benefit and marginal cost curves for a public good. The efficient quantity is
A) A. B) B. C) C. D) zero units supplied.
The improvement in outcomes that occurs when specialized producers exchange goods and services is called:
A. gains from trade. B. absolute advantage. C. comparative advantage. D. specialization.
A newspaper reports that in an urban area the average price of new homes had decreased, but the number of new homes sold had increased. This situation would best be explained by a(n):
a. Increase in supply b. Decrease in demand c. Increase in demand d. Decrease in supply
The aggregate demand curve is downward sloping for all of the following reasons EXCEPT for the:
A. impact of inflation on the consumer price index (CPI). B. distributional impact of inflation on spending. C. response of the Fed to inflation through its policy reaction function. D. effect of inflation on the value of money.