When Comparing a Cash Subsidy and a Voucher Worth the Same

question 59

Multiple Choice

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

• A)a consumer can never be better off with a cash subsidy than with a voucher.
• B)a consumer can never be better off with a voucher than with a cash subsidy.
• C)a cash subsidy will always make the consumer better off than the consumer would be with a voucher.
• D)a voucher will always make the consumer better off than the consumer would be with a cash subsidy.

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Definitions:

Work in Process Inventory

The total value of unfinished goods that are in the process of being manufactured at a given period.

Raw Materials Inventory

The stock of primary materials used in the manufacturing process before they are converted into finished goods.

Factory Labor

The direct and indirect labor costs incurred in manufacturing products, including wages and benefits of workers involved in production.

Total Manufacturing Costs

Sum of all costs directly involved in the manufacturing of a product, including raw materials, labor, and overhead expenses.