If a Subsidy (Going to Producers)is Created for a Good

question 58

Multiple Choice

If a subsidy (going to producers) is created for a good this would

• A)move its supply curve to the right.
• B)move its supply curve to the left.
• C)cause a movement along the supply curve to a (higher price, higher quantity)point.
• D)cause a movement along the supply curve to a (lower price, lower quantity)point.

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Definitions:

Direct Labor-Hours

The total hours worked by employees who are directly involved in the manufacturing process.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and factory management salaries, excluding direct materials and direct labor costs.

Manufacturing Overhead Account

An account used to record indirect costs associated with production, such as utilities and maintenance, not directly tied to any specific product.

Work in Process

Inventory that includes goods that are in the production process but not yet complete.