Suppose Ukraine subsidizes Ukrainian wheat farmers, while Russia offers no subsidy to Russian wheat farmers. As a result of the Ukrainian subsidy, sales of Ukrainian wheat to Russia
A)may prompt Russian farmers to invoke the infant-industry argument.
B)increase the consumer surplus of Russian buyers of wheat.
C)decrease the total surplus of the Russian people.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The subsidy allows Ukrainian wheat to be sold at a lower price, increasing consumer surplus for Russian buyers who can purchase wheat more cheaply.

Suppose Ukraine Subsidizes Ukrainian Wheat Farmers, While Russia Offers No