If the Government Wants to Encourage the Consumption of a Particular

question 9

Multiple Choice

If the government wants to encourage the consumption of a particular good,they should enact:

• A) a subsidy to buyers, since they want to affect consumption of the good.
• B) a subsidy to sellers, since they want more to be produced and offered for sale.
• C) a subsidy to buyers, since they deserve the benefit more than the producers.
• D) a subsidy on either buyers or sellers, since they will both have the same effect on the market.

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Definitions:

Public Services

Services provided by the government or public sector to citizens, often funded through taxation, including healthcare, education, and transportation.

Residential Structures

Buildings designed for people to live in, such as houses, apartments, and condominiums.

Inventories

Quantities of goods and materials held available by businesses for sale or to be used in production processes.

Tangible Capital

Physical assets like buildings, machinery, and equipment that are used in the production process of a business.