Question

Clear Waters Snorkeling Equipment Company has had major losses for the last few years. U.S. Representative Snow has introduced a bill in Congress to provide government subsidies to the company for two years so it can get back on its flippers. Use the economic way of thinking to evaluate this situation. The subsidy program should be an effective method to rescue the company. The major losses indicate that the company is making a product that consumers value less than the value of the resources required to produce it. If Clear Waters Snorkeling Equipment goes out of business, the future total output of the economy will fall below its potential. a. I and II b. I only c. II only d. I, II, and III

Answer 1

Answer:

C. II only

Explanation: