Question :
21) The above figure shows the domestic market for tomatoes. : 1239132
21) The above figure shows the domestic market for tomatoes. Suppose this market is isolated from global competition and there is a support price set at $16. In this figure, what area equals the consumer surplus?
A) area A + area B + area C
B) area A + area F
C) area C + area D + area E + area G
D) area A
E) area F
22) The above figure shows the domestic market for tomatoes. Suppose this market is isolated from global competition and there is a support price set at $16. In this figure, what area equals the producer surplus?
A) area A + area B + area C
B) area A + area F
C) area B + area C + area D + area F
D) area C + area D + area E + area G
E) area F
23) The above figure shows the domestic market for tomatoes. Suppose this market is isolated from global competition and there is a support price set at $16. In this figure, what area equals the deadweight loss?
A) area B + area C + area D + area F
B) area E
C) area C + area D + area E + area G
D) area A
E) area F
24) The above figure shows the domestic market for tomatoes. Suppose this market is isolated from global competition and there is a support price set at $16. In this figure, what area equals the total subsidy paid to tomato farmers?
A) area E
B) area B + area C + area D + area F
C) area C + area D + area E + area G
D) area A
E) area F
25) Price supports are generally used in
A) labor markets.
B) industrial markets.
C) housing markets.
D) markets for services.
E) agricultural markets.
26) To have an effective price support program, the government must
i.isolate the domestic market from the world market.
ii.pay the farmers a subsidy.
iii.introduce a price floor.
A) i only
B) ii only
C) iii only
D) ii and iii
E) i, ii, and iii
27) A price support directly sets the
A) amount of production.
B) subsidy the government must receive from producers.
C) equilibrium quantity.
D) lowest price for which the good may be sold.
E) highest price for which the good may be sold.
28) To keep the price at the level set by a price support, the government must
A) buy some of the good.
B) sell some of the good.
C) receive a subsidy from the producers.
D) insure that imports are readily available.
E) be careful to always set the price support below the equilibrium price.
29) With a price support program, who receives a subsidy?
A) only consumers
B) only producers
C) the government
D) importers
E) Both consumers and producers receive a subsidy.
30) When a price support is set above the equilibrium price, producers ________ the quantity supplied and consumers ________ the quantity demanded.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) do not change; do not change
31) An effective price support ________ producers and ________ a deadweight loss.
A) has no effect on; does not create
B) benefits; creates
C) harms; creates
D) benefits; does not create
E) harms; does not create
