Figure: Supply and Demand with Subsidy (Figure: Supply and Demand

question 46

Multiple Choice

Figure: Supply and Demand with Subsidy (Figure: Supply and Demand with Subsidy) Refer to the figure.The deadweight loss from a $2 subsidy is:

• A)$100.
• B)$800.
• C)$50.
• D)$400.

Explain how government intervention can impact economic efficiency and income distribution.

Evaluate the effects of taxation and government spending on societal welfare.

Distinguish between the concepts of efficiency and equality in the context of economic policy.

Understand the principles of cost-benefit analysis and its application in everyday choices.

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Definitions:

Simplify

The process of altering an expression into its most basic or concise form, without changing its value.

Combine

To bring two or more elements together to form a single entity or result.

Simplify

Simplifying a mathematical expression or equation involves executing operations and merging similar terms to present it in its most basic form.

Combine

To merge or bring together two or more elements to form a single entity or total.