A necessity (such as food and shelter) generally has an inelastic demand

The law of supply implies that the supply curve is

A) flat. B) upward sloping. C) downward sloping. D) vertical.

The figure below illustrates the impact of an export subsidy as imposed by a large country. No imports are permitted.What is the net impact on the consumer surplus of the export subsidy provided by the domestic government?

A. The consumer surplus increases by area a. B. The consumer surplus increases by area (a + b + c). C. The consumer surplus falls by area (a + b + e + f + g). D. The consumer surplus falls by area (a + b).