ECON C175 Lecture 3: Week 3_ Lecture A

Use the following information to answer the next 2 questions. The diagram below represents the market for Widgets. Suppose that the government provides producers with a $20 subsidy per Widget that they sell. $/Pair $30 ... FK В $20 $10+: E JO 2,000 4,000 6,000 Pairs 12. What is the total expenditure by the government on the Widget subsidy? (a) K + L+M + N. (b) B +C + F + G + H + I + K + L + M + N. (C) F + G + H +I+K + L + M + N. (d) B+C.

27. What is the deadweight loss from the shoe subsidy? (a) G + H. (b) I + N. (c) L + M. (d) F + K.

27. What is the deadweight loss from the shoe subsidy? (a) L+M. (b) G + H. (C) F + K. (d) I + N.