U.S. government laws limit the importation of sugar into the United States. As a result, the U.S. price of sugar is about three times as high as the world price of sugar. U.S. sugar producers strongly support these rules. How would most economists explain this policy?
A. It is an example of a form of sin tax intended to help people with a self-control problem involving sweets.
B. The policy is a way of solving an income distribution problem; it redistributes from the rich to the poor.
C. It illustrates the public choice view that small gains concentrated to a few producers can be more important politically than large losses spread over many consumers.
D. It is an example of the government using cost/benefit analysis to correct a market failure.
Answer: C
You might also like to view...
If the Fed lowers the discount rate at the same time it conducts an open market sale, it follows that
A) the money supply will fall. B) the money supply will rise. C) the money supply will remain unchanged. D) cash leakages will rise. E) There is not enough information to answer this question.
The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents. In 2016, the pay phone costs 50 cents for a call and a first-class stamp costs 47 cents. We know that
A. all prices increased from 1950 to 2016: Nominal prices of phone calls, first-class stamps, and the relative prices of phone calls and first-class stamps. B. both the nominal and the relative price of phone calls increased from 1950 to 2016. C. both the nominal prices of phone calls and first-class stamps increased from 1950 to 2016, but we can't tell if the relative prices increased or decreased without more information. D. both the nominal prices of phone calls and first-class stamps increased from 1950 to 2016, but the relative price of stamps increased and the relative price of phone calls decreased from 1950 to 2016.
A production function is a(n)
A. technological relationship. B. economic relationship. C. accounting relationship. D. cost relationship.
Classical growth theory predicts
A) a slowdown in population growth over time. B) sustained increases in economic growth in the long run. C) sustained increases in the standard of living in the long run. D) real GDP per person will remain at the subsistence level over time. E) the population growth rate slows as real GDP per person rises.