Government-sponsored goods are those goods
A) that society views desirable through the political process.
B) that companies give away as promotional prizes.
C) that have lower than average negative externality.
D) that only low-income individuals consume.
Answer: A
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A price ceiling:
a. is the lowest price that the law will allow to be charged in the market. b. is the highest price that the law will allow to be charged in the market. c. is the price that must be charged in the market. d. would be imposed if the government believes the market equilibrium price is too low. e. would only be applicable in the case of non-essential goods.
Refer to the accompanying figure. Suppose the dairy lobby convinces the government to impose price controls in this market. If the government requires cheese to be sold for a price of $8 per pound, total consumer surplus in the market would equal:
A. $120 per day. B. $20 per day. C. $60 per day. D. $80 per day.