Which of the Following Statements Is Correct

question 30

Multiple Choice

Which of the following statements is correct?

• A)Price supports results in a shortage of the good
• B)A subsidy results in an over allocation of resources to farm products
• C)Price supports results in an over allocation of resources to farm products
• D)Income supports has a direct impact on agricultural production

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Definitions:

Autarky

An economic system where a country seeks to be self-sufficient and limit trade with foreign nations.

Consumer Surplus

The disparity between consumers' willingness to pay for a good or service and their actual payment amount.

Producer Surplus

The variance between the amount sellers are ready to accept for a commodity or service and what they actually earn from it.

World Market

The international exchange of goods and services that transcends national borders, influenced by global supply and demand.