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25 Sep 2023, 01:30
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Difficulty:
45%
(medium)
Question Stats:
67% (01:56) correct
33%
(02:27)
wrong
based on 334
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The diamond mines of Extopia produced so many diamonds that the market was overwhelmed; consumption did not keep pace with production. As a result, diamond prices fell. The government of Extopia attempted to support diamond prices through a subsidy scheme: Diamond producers who voluntarily limited the number of diamonds they produced were compensated directly by the government up to a specified maximum payment. The program instituted by the government of Extopia, if successful, will not result in a net cost increase to the government.
Which of the following, if true, is the best basis for an explanation of how this could be true?
A. Depressed diamond prices meant operating losses for diamond producers, decreasing the income of diamond producers, and thus decreasing the taxes paid to the government by diamond producers.
B. Diamond production in countries other than Extopia declined in the same year Extopia’s government instituted the compensatory scheme.
C. In the first quarter after Extopia’s government instituted the compensatory scheme, diamond production declined 8 percent.
D. Because the government specified a maximum subsidy payment per diamond producer, those producers with numerous mines in operation received less support per mine than those producers with fewer mines in operation.
E. Diamond producers desiring to qualify for the compensatory scheme could not continue to produce diamonds and simply withhold them from the market.
Which of the following, if true, is the best basis for an explanation of how this could be true?
A. Depressed diamond prices meant operating losses for diamond producers, decreasing the income of diamond producers, and thus decreasing the taxes paid to the government by diamond producers.
B. Diamond production in countries other than Extopia declined in the same year Extopia’s government instituted the compensatory scheme.
C. In the first quarter after Extopia’s government instituted the compensatory scheme, diamond production declined 8 percent.
D. Because the government specified a maximum subsidy payment per diamond producer, those producers with numerous mines in operation received less support per mine than those producers with fewer mines in operation.
E. Diamond producers desiring to qualify for the compensatory scheme could not continue to produce diamonds and simply withhold them from the market.
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25 Sep 2023, 04:58
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Conclusion : The program instituted by the government of Extopia, if successful, will not result in a net cost increase to the government.
This would be successful if the govt's plan is able to limit or prevent any loss/overhead cost to the govt. Answer choice A tells us just that.
A. Depressed diamond prices meant operating losses for diamond producers, decreasing the income of diamond producers, and thus decreasing the taxes paid to the government by diamond producers.
This would be successful if the govt's plan is able to limit or prevent any loss/overhead cost to the govt. Answer choice A tells us just that.
A. Depressed diamond prices meant operating losses for diamond producers, decreasing the income of diamond producers, and thus decreasing the taxes paid to the government by diamond producers.
26 Sep 2023, 22:39
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A. Depressed diamond prices meant operating losses for diamond producers, decreasing the income of diamond producers, and thus decreasing the taxes paid to the government by diamond producers.
because even after providing compensation to those who restrict production indicates that it is better option for the government than the unrestricted production. A gives why it is so.
because even after providing compensation to those who restrict production indicates that it is better option for the government than the unrestricted production. A gives why it is so.
