When the government levies taxes to subsidize the producers of corn-based sugar, the subsidies will
A) expand the output of a good that consumers value highly relative to cost.
B) expand total employment if employment in the production of corn increases.
C) increase net employment and improve the efficiency of resource use.
D) exert little impact on net employment because expansion of employment in corn production will be partially offset by less employment in other sectors as the result of the taxes.

Question

Quizplus · Accepted Answer

Levying taxes to subsidize the producers of corn-based sugar can lead to an increase in the production of corn-based sugar as producers are incentivized to increase their output due to the subsidies. However, this may result in less employment in other sectors, as resources and labor are diverted towards corn production. Therefore, the expansion of employment in corn production may be partially offset by less employment in other sectors, resulting in little impact on net employment.

When the Government Levies Taxes to Subsidize the Producers of Corn-Based