Exhibit 4-8 Refer to Exhibit 4-8.  Suppose That Wheat Producers  Lobby the Government for the Government

Multiple Choice

Exhibit 4-8
Refer to Exhibit 4-8.  Suppose that wheat producers  lobby the government for a price floor and receive one.  This price floor is set at P_F.  What is the change in the total surplus at the price floor, compared to at the equilibrium price?

A) There was a gain in total surplus equal to (area 1 + 2 + 3)
B) There was a gain in total surplus equal to (area 1 + 2 + 3 + 4 + 5)
C) There was a loss in total surplus equal to (area 4 + 5)
D) There was a loss in total surplus equal to (area 4 + 5 + 6 )