Suppose the government grants a subsidy to domestic producers of an import-competing good. The subsidy tends to result in deadweight losses for the domestic economy in the form of the:

Related MCQs

• Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad. The export revenue of these firms would rise if the foreign demand is:
• A production subsidy that is granted to a producer of an import-competing good
• As a result of trade, specialization in the Ricardian model tends to be
• Countries H and F operate in an H-O world. Each country produces two goods, A and B. Good A is relatively capital intensive and country F is relatively labor abundant. Suppose however, that the production technology is not the same in the two countries. That is, H has a superior technology of production compared to F.
• Tariffs and quotas on imports tend to involve larger sacrifices in national welfare than would occur under domestic subsidies. This is because, unlike domestic subsidies, import tariffs and quotas:
• A rise in the real exchange rate will ____________ the competitiveness of the domestic economy
• What would be the effects of an export subsidy on oil imposed by Russia?
• Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country’s:
• Compared to an import quota, an equivalent tariff may provide a less certain amount of protection for home producers since:
• Suppose Mexico and the United States were the only two countries in the world. There exists anexcess supply of pesos on the foreign exchange market. This suggests that: