A Government Subsidy

question 269

Multiple Choice

A government subsidy

• A) is a policy that can be used to help eliminate the deadweight loss from an external cost.
• B) can help achieve an efficient amount of output when the good has an external benefit.
• C) increases consumers' marginal benefit from the good.
• D) Both answers A and C are correct.
• E) Both answers B and C are correct.

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Definitions:

Sensory Experiences

Perceptions or interactions with the environment through sight, sound, smell, taste, and touch.

Hallucinations

Perceptions in the absence of external stimuli that have a compelling sense of reality.

Delusions

Firmly held false beliefs that are not based in reality, often a symptom of psychiatric disorders such as schizophrenia.

Schizophrenia

A mental disorder characterized by distorted thinking, perceptions, emotions, language, sense of self, and behavior.