Which Panel of Figure 3

question 32

Multiple Choice

Which panel of Figure 3.3 represents the changes in the market for cigarettes when the government increases subsidies for the production of tobacco and at the same time bans smoking in public buildings? Figure 3.3 Shifts of Supply and Demand

• A) A
• B) B.
• C) C.
• D)D.

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Definitions:

Firms

Business organizations that produce goods or services, often to make a profit.

Tariffs

Taxes imposed on imported goods, often to protect domestic industries or to raise government revenue.

Subsidizing Exports

Financial support provided by governments to domestic companies to lower their production costs and make their exports more competitive on the global market.

Free International Trade

The exchange of goods and services between countries without restrictive quotas, tariffs, or other barriers.