The Graph Shown Portrays a Subsidy to Buyers

question 18

Multiple Choice

The graph shown portrays a subsidy to buyers. What will result from this subsidy?

• A)A higher quantity will be bought a nd sold at a higher price.
• B)Customers will be worse off than before the subsidy was placed.
• C)Producers will be worse off than before the subsidy was placed.
• D)None of these are true.

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Definitions:

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, often referred to as the "I-knew-it-all-along" effect.

Overconfidence

A cognitive bias where an individual's subjective confidence in their judgments is reliably higher than their objective accuracy, leading to potential errors in decision making.

Hindsight Bias

The predisposition to think, once an event has taken place, that one could have predicted or anticipated its outcome.

Intuition

An effortless, immediate, automatic feeling or thought, as contrasted with explicit, conscious reasoning.