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GER150H1 Lecture : 1st Feb 2012 TUT 4.doc

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School
UTSG
Department
German
Course
GER150H1
Professor
Lehleiter

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Document Summary

We"ll be watching a few films (with subtitles) Today well be talking about contemporary german theater. Peter handke (who is a more moderen one) Experimental (the above 2 are enabled because of the government funding) Which are large (see chapter 10 of textbook) definition of subsidy: subsidies, plural. 1. a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive. 2. a sum of money granted to support an arts organization or other undertaking held to be in the public interest. Fully staged with a full orchestra 300 nights a year. The cost of german reunification caused the start of the cutting of subsidies. Why does germany theater have so many theaters? federalist. The various states wanted to have their own opera houses.

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Related Questions

The government of Indonesia subsidizes the retail sales of petrol (branded as Premium), kerosene, and diesel (branded as Solar) to consumers, small businesses, and transport operators. As the price of oil increases, the fuel subsidies have grown to one of the largest items in government expenditure.

In June 2013, the government raised the price of Premium from Rp 4,500 per litre to Rp 6,500, and the price of Solar from Rp 4,500 per litre to Rp 5,500.

Indonesia's national oil company, Pertamina, is the exclusive retailer of subsidized fuel. Pertamina also sells non-subsidized fuel, including higher grades of petrol, brand as Pertamax. Competitors, such as Shell, which opened its first retail station in Karawaci, Tangerang, sell only non-subsidized fuel.

Table 1: Pertamina: Sales volume (million kilolitres)

Product 2010 2011 2012
Subsidized Premium 22.92 25.50 44.96
Subsidized kerosene 2.35 1.70 44.96
Subsidized Solar 12.95 14.50 44.96
Non-subsidized fuel 21.54 22.91 19.92
Total 59.76 64.60 64.88

Suppose that, before the cut, the government subsidy for Premium was Rp 3,000 per litre. Calculate the effect of the cut in subsidy on consumer welfare and government expenditure.

Firms are motivated to minimize production costs because

a. the government provides tax credits and subsidies to low-cost producers.

b. least-cost production techniques use the smallest total quantity of resources

c. competitive pressures in the market will drive out higher-cost producers.

d. it is the most environmentally friendly way to produce goods

Corn is a very valuable product for which the U.S. government routinely offers subsidies. With no price support, the equilibrium price for corn is $300 per ton and the equilibrium quantity is 500 million tons per year. Suppose that the government agrees to pay farmers $350 for every ton of corn they produce and can't sell in the market. According to the farmer's market supply curve, 600 million tons per year is supplied at the price of $350 a ton, so production should increase to this amount. However, domestic users of corn cut back their purchases. Only 450 million tons a year is demanded at the price of $350 a ton, and purchases decrease to this amount. Farmers continue to produce 500 million tons of corn per year, so because they produce a greater quantity of corn than domestic buyers are willing to purchase, something must be done with the surplus. To make the price support work, the government decides to buy the surplus. Step 2 Use the scenario to answer the following questions. In a one-page (250-word) document, answer the following questions using the information provided in the scenario from Step 1: * In this example, how many million tons does the government agree to buy? At what price? * How much in total does the U.S. government provide in subsidy to the corn farmers? Why? * Is the price support in this example efficient or inefficient? Explain your reasoning. * Is the subsidy fair? Explain your reasoning.