In the Figure Given Below,D₁ and S₁ Are the Private

question 36

Multiple Choice

In the figure given below,D₁ and S₁ are the private demand and supply curves,of a commodity produced by a competitive firm.S₂ reflects the social marginal cost of production,while S₀ represents the external marginal cost.
-Refer to Figure 20-1.Which of the following policies can be adopted by the government to increase production from the equilibrium level to the efficient level?

• A)Provide a subsidy of $30 per unit
• B)Impose a tax of $100 per unit
• C)Provide a subsidy of $100 per unit
• D)Impose a tax of $20 per unit

Calculate the tax burden on buyers and sellers in a market.

Determine the price paid by buyers and received by sellers after the imposition of a tax.

Describe the effects of a price floor and a price ceiling on market equilibrium.

Identify the conditions that lead to a surplus or shortage resulting from price controls.

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Definitions:

Radius

A bone in the forearm that extends from the lateral side of the elbow to the thumb side of the wrist.

Clavicle

A slender, curved long bone that connects the sternum and the scapula; also called the collar bone.

Scapula

Also known as the shoulder blade, it is a large, flat triangular bone located in the upper back, connecting the humerus (upper arm bone) with the clavicle (collarbone).

Humerus

The long bone in the upper arm, extending from the shoulder to the elbow.