The Following Graph Shows the Market for Milk

question 6

Multiple Choice

The following graph shows the market for milk. Suppose the government introduces a variety of policies that set floor prices for milk at $3. Considering government expenditures on surplus milk but ignoring storage costs, the consumers pay _____ per gallon for the quantity purchased at the support price.​ ​
Figure 16.1
​

• A)$3.00
• B)$4.00
• C)$5.00
• D)$1.00
• E)$2.00

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Definitions:

Comparative Advantage

The ability of an entity to produce a particular good or service at a lower opportunity cost than another, supporting the basis for beneficial trade.

Microchips

Small semiconductor devices containing electrical circuits that can perform calculations or store data, used in electronic devices.

Tires

Rubber-covered, air-filled cylindrical components that provide vehicles with traction and support.

Gain From Trade

The advantage obtained by countries, entities, or individuals from engaging in voluntary trade, due to the specialization and efficient allocation of resources.