Author Question: In the above figure, suppose the government subsidizes the production of milk so that milk ... (Read 186 times)

sdfghj · **on:** Jun 29, 2018

In the above figure, suppose the government subsidizes the production of milk so that milk production increases to 8 million gallons per day.

What is the size of the deadweight loss? (Hint: It is equal to the triangular area of negative consumer and producer surplus that results when output exceeds the efficient level.) A) 12.5 million
B) 6.25 million
C) 4.50 million
D) 2.25 million

Question 2

Which of the following is an example of money functioning as a medium of exchange?

A) Walmart accepting your 20 when you buy a Blu-ray.
B) Apple pricing an iPhone at 299.
C) Bank of America paying you 3 percent on your saving account.
D) You saving your spare change in a jar before depositing them in your savings account.