As applied to agriculture, the special-interest effect suggests that:
A. urban legislators support farm legislation in exchange for rural legislators supporting urban-
oriented legislation.
B. a relatively small number of farmers receive large benefits at the expense of a much larger
group of taxpayers who individually suffer small losses.
C. politicians support farm subsidies because most of the associated costs are hidden rather
than explicit.
D. the size of farm subsidies should vary directly with a farmer's earned income.
Answer: B
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If ethanol production is expected to increase the price of corn, U.S. farmers will likely
A) shift the supply of corn to the left. B) shift the supply of corn to the right. C) reduce the production of corn by sliding down the corn supply curve, all else equal. D) increase the production of corn by sliding up the corn supply curve, all else equal.
Suppose society wants to increase the number of teachers in society but doesn't want to pay teachers any more in salary and benefits. This could only occur by
A) making it more expensive to become a teacher, perhaps by raising college tuition rates. B) making it less expensive to become a teacher, perhaps by offering subsidies to college tuition. C) making computers more powerful. D) increasing the income of student parents.