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

question 178

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) producers will reduce the supply of the product.

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Definitions:

Social Facilitation

The tendency for people to perform differently when in the presence of others compared to when alone, typically showing an improvement in performance on simple or well-rehearsed tasks.

Sadistic

Characterized by deriving pleasure through inflicting pain, suffering, or humiliation on others.

Social Roles

Socially defined behaviors considered appropriate for individuals occupying certain positions within a given group.

Social Norms

are the accepted behaviors or rules within a society or group.