Which of the Following Generalizations About the Benefit of a Subsidy

question 84

Multiple Choice

Which of the following generalizations about the benefit of a subsidy is correct?

• A) The more inelastic the supply of a product, the larger the portion of the benefit will be to buyers.
• B) The more inelastic the demand for a product, the larger the portion of the benefit will be to buyers.
• C) The more elastic the supply of a product, the smaller the portion of the benefit will be to buyers.
• D) The distribution of the benefit of a subsidy is not affected by the elasticity of the supply and demand for the product for which the subsidy is granted.

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Definitions:

Dimensions

The measurements of size or extent of something, including length, width, height, or depth.

Percent

A way of expressing one amount as a fraction of 100, utilized to denote change or comparison between quantities.

Decimal

A number expressed using a decimal system, which includes a point to separate the integer part from the fractional part (e.g., 3.14).

Consecutive Odd Integers

Integers that follow one after another in order and are odd, each differing by two from the next (e.g., 1, 3, 5, ...).