When Given a Choice Between a Cash Subsidy and a Voucher

question 42

Multiple Choice

When given a choice between a cash subsidy and a voucher worth the same dollar amount, but only good for the purchase of a single good:

• A)the consumer will always prefer the voucher to the cash subsidy or be indifferent between the two.
• B)the consumer will always prefer the cash subsidy to the voucher or would be indifferent between the two.
• C)the consumer might prefer the cash subsidy to the voucher or might prefer the voucher to the cash subsidy.
• D)the consumer would prefer to receive neither the cash subsidy nor the voucher.

---

Definitions:

Managerial Accounting

The practice of analyzing, interpreting, and communicating financial information for internal use by management for decision making.

Stakeholders' Confidence

Stakeholders' confidence refers to the trust and belief shareholders, employees, customers, and other stakeholders have in a company's management and future outlook.

Strategy

A “game plan” that enables a company to attract customers by distinguishing itself from competitors.