单选题

A small country has a comparative advantage in the production of pencils. The government establishes an export subsidy for pencils to promote economic growth. Which of the following will bethe most likely result of this policy?

A、 The increase in the domestic producer surplus will exceed the sum of the subsidy and the decrease in the domestic consumer surplus.
B、 As new domestic producers enter the pencils market, supply will increase and domestic prices will decline.
C、 Although domestic producers will receive a net benefit, the policy will give rise to inefficiencies that cause a deadweight loss to the national welfare.

【正确答案】 C

【答案解析】

Export subsidies interfere with the functioning of the free market and result in a deadweight loss to society. The deadweight loss arises on the producer side because the higher subsidized price causes inefficient producers to remain in the market. On the consumer side, the higher price causes those that would have purchased at the lower price to be shut out of the market.