Suppose a Small Island Nation Imports Sugar for Its Population

question 128

Multiple Choice

Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below. With no subsidy, what is producer surplus?

• A)$0 per day
• B)$1,000 per day
• C)$4,000 per day
• D)$8,000 per day

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Definitions:

Present and Future Consumption

The concept of analyzing and balancing what is consumed today against what will be available or necessary for consumption in the future.

Efficient Taxation

A taxation system designed to minimize the economic costs or distortions that it imposes on society, while achieving desired revenue and distributional effects.

Excess Burden

The cost to society created by market inefficiency, typically due to taxes or government policies that distort resource allocation.

Progressive

Relating to progressive policies or movements that advocate for change, reform, and innovation, often in the social, political, or economic sphere.