If an Equal-Cost Lump-Sum Transfer Were Substituted for a Per

question 52

Multiple Choice

If an equal-cost lump-sum transfer were substituted for a per unit excise subsidy on good X:

• A)the consumption of X under the excise subsidy would be higher and the consumer would be on a higher indifference curve.
• B)the consumption of X under the excise subsidy would be higher,but the consumer would be on the same indifference curve.
• C)the consumption of X under the lump-sum transfer would be higher and the consumer would be on a higher indifference curve.
• D)the consumption of X under the lump-sum transfer could be higher,but the cost of the transfer would be higher.

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Definitions:

Annual Year-end Payments

Payments made at the end of the fiscal year, which can include bonuses, dividends, or debt payments.

Journal Entry

A record in accounting that logs the transactions and their impact on the accounts in a financial system using debits and credits.

Issuance

The process of distributing something, especially financial instruments like stocks or bonds, to investors.

Semiannually

Taking place twice within a year or every half year.