Exhibit 4-8 Refer to Exhibit 4-8.  Suppose That Wheat Producers  Lobby the Government for the Government

question 48

Multiple Choice

Exhibit 4-8
Refer to Exhibit 4-8.  Suppose that wheat producers  lobby the government for a price floor and receive one.  This price floor is set at P_F.  What is the size of the producers' surplus at P_F?

• A)area 2 + 3 + 4 + 5
• B)area 2 + 3
• C)area 4
• D)area 6

---

Definitions:

Efficient

Refers to a level of performance that uses the least amount of inputs to achieve the highest amount of output.

Utility Possibilities Frontier

A curve that shows the maximum feasible amount of two goods that can be produced with available resources and technology, indicating the trade-offs and efficiency in production.

Utility

In economics, utility refers to the satisfaction or pleasure derived by consumers from consuming goods or services.

Efficient

An attribute of a market or process where resources are allocated in the most effective way, yielding the maximum benefit for a given set of resources.