Refer to the Diagrams for Two Separate Product Markets

question 197

Multiple Choice

Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Q₀ and that government purposely shifts the market supply curve from S to S₁ in diagram (a) on the left and from S to S₂ in diagram (b) on the right. The shift of the supply curve from S to S₁ in diagram (a) might be caused by a per-unit

• A)subsidy paid to the producers of this product.
• B)tax on the producers of this product.
• C)subsidy paid to the buyers of this product.
• D)tax on the buyers of this product.

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Definitions:

Net Float

The difference between checks written against a bank account and those that have been deposited but not yet cleared, affecting the balance.

Chequing Account

A bank account allowing the account holder to withdraw funds, write checks, and use electronic debit to access funds.

Cheque

A cheque is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or a named party.

Regional Lockbox System

A banking service that speeds up collection of payments by establishing a network of collection points.