Suppose You Are a Government Analyst and You Think Beans

question 71

Multiple Choice

Suppose you are a government analyst and you think beans are particularly nourishing.You decide to subsidize beans in order to encourage people to eat more of them.(By subsidizing an item,consumers pay a lower price. ) After you successfully lower bean prices,you notice that consumption of beans has fallen.What went wrong?

• A)The substitution effect caused people to substitute ramen noodles and rice for beans.
• B)The income effect caused people's real income to fall so they could no longer afford as much food.
• C)The income effect caused people's real income to rise so they purchased less of what they considered to be inferior goods.
• D)Demand for beans is price inelastic.

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Definitions:

Withdrawing

The act of pulling back or removing oneself from a situation, engagement, or commitment.

Controlling

The management function that involves monitoring performance, comparing it with goals, and taking corrective action as needed.

Conflict Phase

A stage in a dispute or disagreement where tensions and differences between parties are openly expressed and become more apparent.

Group-Development Process

A methodology involving multiple individuals working collaboratively through stages to develop, plan, and execute a project or solution.