On the farm subsidy front, farmers in Europe received subsidies of about $6 a bushel, U.S. farmers got $2.50 a bushel, Canadian farmers received subsidies of only 40 cents a bushel.

Source: CBC News, August 6, 2004

In which market do you think the surplus (as a percentage of equilibrium output) is largest and which market is the most inefficient?

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Part 1

Of the three markets, the surplus (as a percentage of equilibrium output) is largest in ______ and the market is most inefficient in _______.

A.

Europe; Canada

B.

Europe; Europe

C.

Canada; Canada

D.

the United States; the United States