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The Figure Given Below Shows the National Market for Mopeds

Question 52

Multiple Choice

The figure given below shows the national market for mopeds in a country. Dd and Sd are the domestic demand and supply curves of mopeds respectively. The figure given below shows the national market for mopeds in a country. D<sub>d </sub>and S<sub>d</sub> are the domestic demand and supply curves of mopeds respectively. The figure given below shows the marginal external benefit curve (MEB) of the country from the production of domestic mopeds. What will be the impact on the national well-being if, instead of imposing a tariff of $50 per unit, the government provides a subsidy of $50 per unit to the domestic manufacturers of mopeds? A) The national welfare will increase by $5 million. B) The national welfare will decline by $2.5 million. C) The national welfare will increase by $10.75 million. D) The national welfare will decline by $5 million. The figure given below shows the marginal external benefit curve (MEB) of the country from the production of domestic mopeds. The figure given below shows the national market for mopeds in a country. D<sub>d </sub>and S<sub>d</sub> are the domestic demand and supply curves of mopeds respectively. The figure given below shows the marginal external benefit curve (MEB) of the country from the production of domestic mopeds. What will be the impact on the national well-being if, instead of imposing a tariff of $50 per unit, the government provides a subsidy of $50 per unit to the domestic manufacturers of mopeds? A) The national welfare will increase by $5 million. B) The national welfare will decline by $2.5 million. C) The national welfare will increase by $10.75 million. D) The national welfare will decline by $5 million. What will be the impact on the national well-being if, instead of imposing a tariff of $50 per unit, the government provides a subsidy of $50 per unit to the domestic manufacturers of mopeds?


A) The national welfare will increase by $5 million.
B) The national welfare will decline by $2.5 million.
C) The national welfare will increase by $10.75 million.
D) The national welfare will decline by $5 million.

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