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

Question 45

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Exhibit 4-8
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<sub>F</sub>. 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 )
-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 PF. 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 )

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