The Value of a Price-Distorting Subsidy for a Three-Bedroom Apartment

question 9

Multiple Choice

The value of a price-distorting subsidy for a three-bedroom apartment is $100 per month. This means that the person choosing to live in an apartment of that size would have to pay an extra $100 per month at the market rent. Then it follows that:

• A) that person would be worse off if she received a cash subsidy of $100 per month.
• B) that person would be better off if she received a cash subsidy of $100 per month.
• C) that person would be just as well off if she received a cash subsidy of less than $100 per month.
• D) both b and c

---

Definitions:

Raw Materials

The basic materials from which goods are made.

Cement Manufacturing

The process of producing cement, a key ingredient in concrete, which involves the heating, grinding, and mixing of raw materials like limestone and clay.

Communication Technologies

Tools and applications that facilitate the exchange of information through various means, including digital, electronic, and traditional media.

Fiber-Optic Networks

Telecommunications infrastructure that uses glass or plastic fibers to transmit data at high speeds using light signals.