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Question
In the U.S. sugar market
a. subsidies costs taxpayers $10 billion per year.
b. California grows the most sugarcane in the country.
c. sugar subsidies cause sugar to be cheaper than high-fructose corn syrup.
d. sugar price ceilings cause regular shortages of sugar.
e. U.S. sugarcane is more expensive than in Canada.
Answer
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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