Which of the Following Government Actions Will Decrease Surplus Food

question 75

Multiple Choice

Which of the following government actions will decrease surplus food supplies?

• A)An increase in the loan rate.
• B)A decrease in acreage set-asides.
• C)Subsidized advertising of U.S.farm products in foreign markets.
• D)A decrease in import restrictions.

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Definitions:

Externalities

Economic side effects or consequences of a commercial activity that affect other parties without being reflected in the costs of the goods or services involved.

Negative Externality

A cost that affects a party who did not choose to incur that cost or benefit from it, often considered a failure of the market.

Market Inefficiency

A situation where market prices do not always accurately reflect the true value of a good or service, possibly due to lack of information or irrational behavior.

Supply And Demand Diagram

A graphical representation of the relationship between the quantities of a good that sellers are willing to sell and buyers are willing to buy, at various prices.