When Assessing the Welfare Effect of an Export Subsidy on a Small

question 146

Multiple Choice

When assessing the welfare effect of an export subsidy on a small nation, it can be shown that the subsidy:

• A) increases national welfare.
• B) can be paid for out of increased revenues.
• C) hurts producers and helps consumers.
• D) is just the same as a tariff on imports: it raises domestic price, increases domestic production, and involves the same efficiency and consumption losses.

---

Definitions:

Maslow's Hierarchy

A theory in psychology that prioritizes human needs in a pyramid structure, starting from basic physiological needs to self-actualization at the top.

Arousal Theory

A theory that suggests people are motivated to maintain an optimal level of arousal, which varies from one individual to another.

Social Networking Sites

Websites or platforms where individuals can create profiles, share information, and interact with others to maintain social connections.

Instinct Theories

Theories that explain human behavior as motivated by automatic, involuntary, and unlearned responses.