Does a Subsidy to Buyers Affect the Supply Curve

question 10

Multiple Choice

Does a subsidy to buyers affect the supply curve?

• A) Yes, it shifts supply up by the amount of the subsidy.
• B) Yes, it shifts supply to the right by the amount of the subsidy.
• C) No, the quantity supplied will increase, but the supply curve does not move.
• D) No, the quantity supplied will decrease, but the supply curve does not move.

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Definitions:

Intangible Benefits

Advantages or gains that cannot be easily measured or quantified, such as brand reputation or employee morale.

Discount Rate

The interest rate used to discount future cash flows to their present value, often relevant in investment and finance decisions.

Capital Budgeting

The process by which a business evaluates and selects major capital investments based on their potential to generate additional revenue or reduce costs.

Simple Rate of Return

A method to evaluate the profitability of an investment by dividing the annual incremental net operating income by the initial investment cost.