When the Support Price for Milk and Dairy Products Is

question 101

Multiple Choice

When the support price for milk and dairy products is higher than the market equilibrium price,_____

• A)a typical consumer-taxpayer pays an artificially high price for milk and, as a taxpayer, also pays for the surplus milk.
• B)the prices of specialized resources, such as cows and pasture land, decrease.
• C)the producer surplus enjoyed by dairy farmers decreases.
• D)farmers decrease their quantity supplied in response to the higher price.
• E)farmers end up earning a negative rate of return on their investment in the long run.

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Definitions:

Avoidance Theory

A psychological theory suggesting that individuals may engage in certain behaviors to avoid experiencing discomfort or distressing thoughts and feelings.

Bodily Arousal

The physiological response of the body to stimuli, often leading to an increase in heart rate, blood pressure, and energy level as part of the fight or flight response.

Irrational Assumptions

Erroneous beliefs that lack evidence or rationality, often leading to maladaptive emotions and behaviors.

Existential Anxiety

According to existential theorists, a universal fear of the limits and responsibilities of one’s existence.