A Subsidy Causes Deadweight Loss

question 57

Multiple Choice

A subsidy causes deadweight loss:

• A) only because of inefficient increases in trade.
• B) only because of unexploited gains from trade.
• C) because of both inefficient increases in trade and the unexploited gains from trade.
• D) only if the supply of the good being subsidized is unit elastic.

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Definitions:

Democratic Movements

Collective efforts and organizations that advocate for democracy, including the promotion of democratic governance, free elections, and human rights.

Technological Revolution

A period of rapid technological change that fundamentally alters the social, economic, or cultural condition of society.

Capitalist Industrialization

The transformation of economies from primarily agricultural to industrial and manufacturing, driven by capitalist markets and private ownership.

Moral Order

The set of moral norms, values, and standards that govern the behavior of individuals within a society or group.