Suppose That the Government Provides a Subsidy for the Consumption

question 33

Multiple Choice

Suppose that the government provides a subsidy for the consumption of good X.The demand curve with the subsidy will lie to the ______________ of the demand curve without the subsidy,and the equilibrium price of good X will be __________ with the subsidy than without.

• A) left;lower
• B) left; higher
• C) right; higher
• D) right;lower

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Definitions:

Conspicuous Consumption

The spending of money on and the acquisition of luxury goods and services to publicly display economic power—either the actual income or the perceived social status of the individual.

Waste

Materials or substances that are no longer useful or consumed and are discarded or disposed of.

Leisure

Free time when one is not working or occupied; time for relaxation, hobbies, or activities of choice.

Economic Boom

A period of significant growth and prosperity in an economy, marked by increases in production, sales, and employment.