A government subsidy for a good
A) is similar to a tax insofar as it decreases the production of the good being subsidized.
B) increases production of the subsidized goods.
C) punishes those who consume or produce the subsidized good.
D) has no effect on the quantity of the good produced.
B
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By 1914 the American economy had transformed into an agricultural giant
Indicate whether the statement is true or false
Newspaper accounts of the U.S. labor market often point out that many people are working more hours than their parents did. What might explain this phenomenon?
A) the substitution effect B) the endowment effect C) bounded rationality D) the income effect
A monopolist maximizes profits by producing where which of the following occurs?
A. MC = P. B. AC = P. C. MC = MR. D. AC = AR.
When the conditions in a competitive price-taker market are such that the firms are consistently unable to cover their production costs,
a. the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits. b. all firms will go out of business since consumers will not pay prices that enable firms to cover their production costs. c. some firms will exit from the industry, and market price will rise until the remaining firms can earn the normal rate of return. d. resource prices will increase, competition will decline, and eventually the firms in the industry will earn monopoly profit.