SCENARIO: FREEDONIAN EXPORTS in the Small Country of Freedonia, the Domestic Demand for Domestic

question 78

Multiple Choice

SCENARIO: FREEDONIAN EXPORTS
In the small country of Freedonia, the domestic demand for
Widgets is represented by P = 100 - 3Q; the home supply
Of widgets is represented by P = 1Q.
Reference: Ref 10­4
(Scenario: Freedonian Exports) Is the subsidy paid to
Freedonias's widget exporters considered part of the
Deadweight losses of the subsidy?

• A)Yes: they are a payment to Freedonian exporters.
• B)Yes: they are paid by Freedonian exporters that supply the domestic market.
• C)No; they are a redistribution of income within the Freedonian economy.
• D)No; consumers of Freedonian widget exports pay the subsidies.

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Definitions:

Basic Anxiety

A theory proposed by Karen Horney that suggests anxiety is the primary driving force behind human behavior, originating from childhood feelings of helplessness and isolation.

Helplessness

A state of being unable to prevent or avoid negative outcomes, often leading to feelings of powerlessness.

Cognitive Complexity

A cognitive style or way of construing the environment characterized by the ability to perceive differences among people.

Castration Anxiety

A concept in psychoanalytic theory referring to a child's fear of losing their genitals, symbolizing a fear of punishment for sexual desires.