Suppose the government establishes a price support for soybeans. The new government program will tend to
A) decrease the output of soybeans.
B) increase the quantity demanded of soybeans.
C) decrease the demand for soybeans.
D) increase a farmer's opportunity cost of producing other commodities (such as corn), which could be grown on the same land used to grow soybeans.
E) do none of the above.
D
You might also like to view...
The view that taxes should impose as little excess burden as possible and should be shared fairly among the taxpayers is consistent with the view of government ____
a. as a type of club b. as a benevolent despot c. as a constitutional republic d. as a constitutional democracy
Consider the two following statements: I. x is an inferior good. II. x exhibits Giffen's Paradox. Which of the following is true?
a. I implies II, but II does not necessarily imply I. b. II implies I, but I does not necessarily imply II. c. I and II are statements of the same phenomenon.
If the MPC in an economy is 0.9, the government could shift the aggregate demand curve rightward by $40 billion by
A. increasing government purchases by $4 billion. B. decreasing taxes by $4 billion. C. increasing taxes by $4 billion. D. increasing government purchases by $40 billion.
A monopoly exists when
A. The government intervenes on behalf of consumers. B. A small number of firms are the only producers of a good. C. A large number of firms are producing a good. D. One firm produces all the output for a particular good or service.