Does a Subsidy to Buyers Affect the Demand Curve

question 160

Multiple Choice

Does a subsidy to buyers affect the demand curve?

• A) Yes; the demand curve shifts up by the amount of the subsidy.
• B) Yes; the demand curve shifts to the right by the amount of the subsidy.
• C) No; the demand curve does not move, as quantity demanded increases instead.
• D) No; the demand curve does not move, as quantity demanded decreases instead.

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Definitions:

Temperature

A measure of the average kinetic energy of the particles in an object or system, indicating how hot or cold the object is.

Increased

Increased refers to a situation or condition becoming larger, greater, or higher in number or amount.

X-variable

An independent variable in mathematical functions and experiments that can be changed to observe its effect on the outcome.

Y-variable

The dependent variable in an equation or a model, whose value is predicted or explained by other variables.