A production subsidy combined with free trade
A)has the same deadweight costs as a tariff.
B)has only consumption deadweight costs.
C)has only production deadweight costs.
D)None of the above.

Question

Quizplus · Accepted Answer

A production subsidy combined with free trade results in only production deadweight costs because it encourages overproduction, but does not restrict consumption like a tariff would.

A Production Subsidy Combined with Free Trade