Why then might a subsidy be considered inefficient

Assignment Help Microeconomics

Reference no: EM132177154

Question: A subsidy will increase consumer and producer surplus in a market and will increase the quantity of trades. Why, then, might a subsidy (such as a subsidy for producing corn in the United States) be considered inefficient?

Reference no: EM132177154

Questions Cloud

What will happen to the size of the deadweight loss : Suppose Colombia maintains a price floor for coffee beans. What will happen to the size of the deadweight loss if the price floor encourages new growers.

Will it help smokers if the state imposes the tax on stores : Many states tax cigarette purchases. Suppose that smokers are unhappy about paying the extra charge for their cigarettes.

What is the value of the call option : The price of Ervin Corp. stock will either be $67 or $84 at the end of the year. What is the value of the call option if the strike price is $75 per share

What are the potential benefits of such a policy : In the Philippines, rice production is lower than rice consumption, resulting in a need to import rice from other countries.

Why then might a subsidy be considered inefficient : A subsidy will increase consumer and producer surplus in a market and will increase the quantity of trades. Why, then, might a subsidy.

What will the carpet cost in six years : A condo association is required to set aside funds to replicate the common area carpet. What will the carpet cost in six years? Show all work

Do you expect to collect more revenue in the first year : A state facing a budget shortfall decides to tax soft drinks. You are a budget analyst for the state. Do you expect to collect more revenue in the first year.

Analysis of political currents in central and south america : After an analysis of political currents in Central and South America, you conclude that future coffee prices will be lower than currently indicated by futures

Is the government doing enough to control fraud and abuse : How would you decide when enough is enough in terms of life support efforts for patients, and who might help to make such important decisions?

User Account

All Pages