What Is a Subsidy

question 24

Multiple Choice

What is a subsidy?

• A)A limit on the number of goods that are imported
• B)A tax on imports
• C)A direct payment to the producers of goods to help them remain profitable
• D)A foreign aid program directed at developing countries

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Definitions:

Sunk Cost

Expenses that have already been incurred and cannot be recovered, and should not affect future economic decisions.

Remodeling

The process of improving or updating the structure, layout, or appearance of an existing building or space.

Marginal Costs

The expense incurred from the manufacture of an extra single product or service unit.

Total Cost

All expenditures related to the manufacture of goods or provision of services, integrating both unchanging and dynamic costs.