In this graph presented in the lecture notes, the USDA has imposed a price floor of $1 per pound on the sale of dry milk, and the government is willing to purchase dry milk from farmers at this price. Which of the following statements is not a primary concern to analysts who have studied this program?Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aThe policy may lead to calcium deficiencies among some consumers who become priced out of the market for milkbThe policy is likely to entail high costs to taxpayerscThe price control will lead to excess demand for milk, thus resulting in long queues (lines) for the productdMany of the benefits of the policy will likely accrue to wealthy corporations in far away states that are not necessarily the intended beneficiaries of the policy.
Question
In this graph presented in the lecture notes, the USDA has imposed a price floor of $1 per pound on the sale of dry milk, and the government is willing to purchase dry milk from farmers at this price. Which of the following statements is not a primary concern to analysts who have studied this program?Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aThe policy may lead to calcium deficiencies among some consumers who become priced out of the market for milkbThe policy is likely to entail high costs to taxpayerscThe price control will lead to excess demand for milk, thus resulting in long queues (lines) for the productdMany of the benefits of the policy will likely accrue to wealthy corporations in far away states that are not necessarily the intended beneficiaries of the policy.
Solution
The statement that is not a primary concern to analysts who have studied this program is "cThe price control will lead to excess demand for milk, thus resulting in long queues (lines) for the product". This is because a price floor, such as the one imposed by the USDA, actually leads to a surplus of the product, not a shortage. Therefore, there would not be excess demand or long lines for the product. Instead, the concern would be what to do with the excess supply.
Similar Questions
If producers of milk try to maintain a price above the equilibrium price then the condition of excess demand will exist.Group of answer choicesTrueFalse
The cost of milk (an input for ice cream) decreases. The equilibrium price and the equilibrium quantity
Question 15The current price in the market for milk is $2.00 If the government imposed a price floor of $4.00 in this market total surplus would ____________.1 pointincreasedecreasedecrease first, and then increasenot change
The figure below shows supply and demand curves for milk. If the government passes a $2 per litre specific tax, the loss in consumer surplus will equalGroup of answer choicesb + c + f + g.f + g.b + f.c + g.
Direct Payment Programs involve the setting of a target price for an agricultural commodity. When the target price is set higher than the market price which of the following will not occur?Question 44Select one:a.there will be an increase in domestic or foreign demand, increasing farm prices and income. b.there will be a surplus of that product relative to the demand for it.c.there will be downward pressure on the market equilibrium price. d.the government will make deficiency payments to farmers.e.excess production.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.