Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 17 - Asymmetric Information, Voting, and Public Choice - Problems - Page 372: 2a

Answer

Average cost of higher sugar prices: ${$6.67}$/person Average cost of money directly paid to sugar growers: ${$0.50}$/person Combined average cost: $\$7.17$/person

Work Step by Step

You can simply divide both of the amounts of money by the number of people to find the cost per person. So, for the average cost of higher sugar prices = $\frac{$2,000,000,000}{300,000,000}$ = ${$6.67}$/person So, for the average cost of the money directly paid to sugar growers = $\frac{$150,000,000}{300,000,000}$ = ${$0.50}$/person Combined average cost per person: $6.67+ $0.50 =$7.17 per person (approx).
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