Subsidizing coal mining and orange growing have both been found to be economically inefficient in that the costs outweigh the benefits. However, a subsidy on coal mining would help the coal producers in West Virginia and a subsidy on orange growing would help the orange farmers in Florida. So the senator from West Virginia approaches the senator from Florida and says that he will vote for the
orange subsidy if the Florida senator votes for the coal-mining subsidy. The Florida senator agrees. Which term best describes what just happened?
a. the shortsightedness effect
b. logrolling
c. the use of user charges
d. the political voter theory
B
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The above figure shows the competitive market for turkey. The producer surplus for the 300 millionth pound of turkey is
A) $1.20 per pound. B) $135 million. C) $0.30 per pound. D) $0.80 per pound.
During the postwar period, increased real wages for women led to an increase in the labor force participation rate for women. This implies that, for women,
a. the substitution effect of a wage increase is greater than the income effect. b. the substitution effect of a wage increase is less than the income effect. c. the substitution effect of a wage increase equals the income effect. d. wage increases do not have an income effect.