When Does a Subsidy That Benefits Consumers Result in a More

question 294

Multiple Choice

When does a subsidy that benefits consumers result in a more efficient allocation of a resource?

• A) when the good being produced or consumed is not scarce
• B) when the good being produced or consumed generates a negative externality
• C) when the good being produced or consumed generates a positive externality
• D) when the equilibrium price of the good is one that consumers don't like

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Definitions:

Hertz

A unit of frequency equal to one cycle per second, used to measure the frequency of oscillations and vibrations.

Bit

The most basic unit of data in computing and digital communications, which can have a value of either 0 or 1.

Ppm

Parts per million, a unit of measurement used to describe the concentration of a substance in a mixture or solution.

Dpi

Dpi stands for dots per inch, a measurement of print resolution that indicates how many dots of ink or toner a printer or copier can produce within a linear inch, affecting image quality.