Suppose That the World Price of Sugar Is $100 Per

question 119

Multiple Choice

Suppose that the world price of sugar is $100 per ton. If a small-country exporter gives its sugar exporters a subsidy of $50 per ton, then the country will:

• A) suffer deadweight production and consumption losses.
• B) enjoy deadweight production and consumption gains.
• C) suffer deadweight production losses only.
• D) suffer deadweight consumption losses only.

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