Subsidies Are Most Likely To

question 29

Multiple Choice

Subsidies are most likely to:

• A)reduce consumer surplus.
• B)increase total economic surplus.
• C)reduce total economic surplus.
• D)leave total economic surplus unchanged, but transfer surplus from producers to consumers.

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Definitions:

Minimum Wage

The lowest hourly, daily, or monthly remuneration that employers are legally allowed to pay to workers.

Income-Maintenance Programs

Governmental schemes designed to ensure individuals have a minimum income level through benefits or transfers, often to support those unemployed or in poverty.

Elasticity Of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, showcasing consumer sensitivity to price changes.

Political Lobbying

The act of attempting to influence decisions made by officials in the government, most often legislators or members of regulatory agencies.