The figure above shows the market for milk in Cowland. If a subsidy paid to producers of $1 per gallon of milk is introduced, what is the price that consumers pay?
A) $3.00 a gallon
B) between $3.00 and $4.00 per gallon
C) $4.00 a gallon
D) between $4.00 and $5.00 per gallon
B
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Which of the following is TRUE about a firm in monopolistic competition in the long run?
A) P = MC B) P = MR C) ATC = MC D) P = ATC E) MC = ATC
Financial intermediaries make the allocation of resources more efficient by
A. Lending or investing the savings they hold. B. Reducing search and information costs in the financial markets. C. Transferring purchasing power from savers to dissavers. D. Spreading risk out over many individuals.
An office worker who loses her job because she does not have the necessary computer skills is, ceteris paribus:
A. Frictionally unemployed. B. Seasonally unemployed. C. Cyclically unemployed. D. Structurally unemployed.
If Congress wanted to counteract the effects of a recession it could
A) increase tax rates. B) increase taxes by a fixed amount. C) increase government purchases. D) decrease defense spending.