Suppose a Small Island Nation Imports Sugar for Its Population

question 129

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. If the government provides a subsidy of $500 per ton, then relative to before the subsidy, consumer surplus will ______ by ______ per day.

• A)decrease; $500
• B)decrease; $1,000
• C)increase; $1,000
• D)increase; $5,000

Comprehend the reasons behind the use of credit cards and factoring by sellers.

Understand the concept of factoring receivables and its implications.

Calculate the maturity amount of a promissory note.

Grasp the impact of dishonoring notes and the recovery of bad debts.

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Definitions:

Marginal Cost

The increase in cost resulting from the production of an extra unit of a product or service.

Markup

The difference between the cost of a product or service and its selling price, expressed as a percentage of the cost.

Marginal Cost

The additional total expense incurred from producing one more unit of a product or service.

Free Entry

A market condition where firms can freely enter or exit the industry without facing significant barriers to entry.