In a Perfectly Competitive Market, Which of the Following Will

question 16

Multiple Choice

In a perfectly competitive market, which of the following will not occur as a result of a subsidy?

• A)The market will under-produce relative to the efficient level.
• B)Consumer surplus will be higher than with no subsidy.
• C)Producer surplus will be higher with no subsidy.
• D)The subsidy causes a deadweight loss.

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Definitions:

Population Proportion

The fraction of a population that possesses a particular attribute or characteristic.

Margin of Error

A measure indicating the level of random sampling error present in the findings of a survey.

Confidence Interval

A set of numbers, coming from the statistics of a sample, which probably includes the value of a parameter from a population that is not known.

Sample Proportion

The fraction of the sample that represents a particular category or characteristic, often used to estimate the proportion in the larger population.