The fact that price subsidies reduce economic surplus implies that:
A. we can find an alternative policy that will make both the rich and the poor better off.
B. the quantity bought and sold in the market will fall.
C. price subsidies help the rich but not the poor.
D. price subsidies are not effective at lowering prices.
Answer: A
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Which of the following statements about the Social Security (OASDI) program is FALSE?
A) Benefits are paid to individuals who would be financially secure in their absence. B) Benefits are based on need. C) Benefits are an intergenerational transfer program from those who work to those who don't work. D) When an insured worker dies, benefits continue for widows or other dependents.
Suppose the government imposes a price ceiling above the equilibrium price of a given good. Which of the following is the most likely result?
A) Some other rationing device will emerge to allocate the good among buyers. B) Some buyers and sellers will be willing to risk breaking the law in order to exchange the good at a price above the equilibrium price since there would be a shortage of the good at the price ceiling. C) No change will occur in the market. D) Brute force will be used to allocate the good among buyers. E) a, b, and d
Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia
a. may prompt Russian farmers to invoke the infant-industry argument. b. increase the consumer surplus of Russian buyers of wheat. c. decrease the total surplus of the Russian people. d. All of the above are correct.
Having the government issue permits that allow polluting
A. would decrease the levels of pollution. B. is an example of a command-and control regulation. C. would penalize companies that were good at curbing their pollution. D. has been very ineffective in curbing pollution.