When a Government Subsidy Is Granted to the Buyers of a Product

question 155

Multiple Choice

When a government subsidy is granted to the buyers of a product, sellers can end up capturing some of the benefit because

• A) the market price of the product will fall in response to the subsidy.
• B) the market price of the product will rise in response to the subsidy.
• C) the market price of the product will not change in response to the subsidy.
• D) buyers will reduce their demand for the product.

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Definitions:

Psychodynamic

A psychological perspective that emphasizes the influence of the unconscious mind, internal conflicts, and childhood experiences on behavior.

Existential

Relating to existentialism, a philosophical theory that emphasizes individual freedom, choice, and meaning within an inherently meaningless universe.

Illness Anxiety

A disorder characterized by excessive worry about having a serious illness, despite medical reassurance and lack of diagnostic evidence.

Somatic Symptom

A physical symptom that can cause significant distress or impairment, which may be linked to psychological distress though it lacks a medical cause.