When the Federal Government Installs a Price Support Program That

question 30

Multiple Choice

When the federal government installs a price support program that requires the government to purchase all of a good not bought in the private economy at the support price, changes in producer surplus:

• A) are negative.
• B) are positive, but more than offset by the cost to consumers and the government.
• C) are positive, and not offset by the cost to consumers and the government.
• D) and consumer surplus are both positive.

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Definitions:

Water Table

The surface between the unsaturated zone and the saturated zone, as in the top of groundwater in an unconfined aquifer.

Stalactites

Icicle-shaped formations that hang from the ceilings of caves, formed by the deposit of minerals from dripping water.

Calcite

A common and widely distributed mineral consisting of calcium carbonate (CaCO3), important in the formation of limestone and marble.

Stalactite

A conical or cylindrical cave formation that hangs from the ceiling of a cave and is composed mostly of calcium carbonate.