What Is the Impact of a Government Subsidy to Producers

question 165

Multiple Choice

What is the impact of a government subsidy to producers?

• A) Less is produced relative to the efficient level, creating a deadweight loss.
• B) More is produced relative to the efficient level, creating a deadweight loss.
• C) Producer surplus is increased, which creates a larger consumer surplus.
• D) Producers are able to sell the product at a higher price.
• E) Consumers must pay a higher price for the good.

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Definitions:

Pediculosis

Infestation with lice, leading to itching and discomfort, which can affect the head (capitis), body (corporis), or pubic area (pubis).

Keratin

A type of protein found in hair, nails, and the outer layer of skin, responsible for protecting these structures.

Epidermis

The outermost layer of skin that provides a waterproof barrier and creates our skin tone.

Dermis

The thick layer of living tissue below the epidermis, containing nerves, blood vessels, sweat glands, and hair follicles.