Tobacco production is one of the more heavily subsidized industries in the Unite

Question

Tobacco production is one of the more heavily subsidized industries in the United States. Suppose that as a result of intense lobbying from health-related concerns, Congress repeals the tobacco firms subsidies. Which of the following scenarios would likely occur?
a. The tobacco firms supply curve would shift leftward, since it would now cost more to produce each level of output.
b. There would be a movement along the supply curve for tobacco, but the supply curve would not shift.
c. The tobacco firms supply curve would shift rightward, as it would now be cheaper to produce each level of output.
d. The tobacco firms would not experience any shift in their supply curves; subsidies dont affect output.
27.Suppose the minimum wage is set at $7. The result will be
a. none of the above
b. a shortage of workers.
c. no effect on the labor market.
d. a surplus of workers.

Explanation / Answer

the answer ll be following. a. The tobacco firms supply curve would shift leftward, since it would now cost more to produce each level of output. And d. a surplus of workers.

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