A government subsidy to the producers of a product:
A. reduces product supply.
B. increases product supply.
C. reduces product demand.
D. increases product demand.
Answer: B
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Under perfect competition, if an industry is characterized by positive economic profits in the short run
a. firms will leave the market in the long run and the short-run supply curve will shift outward. b. firms will enter the market in the long run and the short-run supply curve will shift outward. c. firms will enter the market in the long run and the short-run supply curve will shift inward. d. firms will leave the market in the long run and the short-run supply curve will shift inward.
Who most clearly gains from a tariff on imports?
a. Consumers in the importing country b. Producers in the exporting country c. The government in the exporting country d. Producers in the importing country