Whether a Subsidy for a Certain Good Is Given to a Demander

question 31

Multiple Choice

Whether a subsidy for a certain good is given to a demander or supplier is irrelevant because

• A) in either case,the price that the demander has to pay will decrease;while the price the supplier receives will increase
• B) in either case,the price that the demander has to pay will increase;while the price the supplier receives will decrease
• C) either situation will create excess demand
• D) either situation will create excess supply
• E) none of these are correct

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Definitions:

Franchise Agreement

A legal, binding contract between a franchisor and franchisee, outlining the terms and conditions for operating a franchised business.

Joint Venture

A collaborative agreement where several participants contribute their resources to fulfill a targeted objective.

Licensing Agreement

A contract in which one company (the licensor) grants permission to another company (the licensee) to use the licensor’s intellectual property in return for payment.

Ethical Decision

The process of choosing among alternatives in a manner consistent with ethical principles.