If Instead of a Per-Unit Subsidy, the Government Offered to Pay

question 34

Multiple Choice

If instead of a per-unit subsidy, the government offered to pay for half the good's price, no matter the price:

• A) the wedge method would no longer work.
• B) instead of a parallel shift in demand, the subsidy should be modeled as a demand curve that is twice as steep.
• C) demand would be perfectly elastic.
• D) there would be no change in how we model the subsidy.

---

Definitions:

Social Readjustment Rating Scale

The Social Readjustment Rating Scale measures the stress level of individuals by assigning numerical values to different life events, indicating their potential impact.

Change Score

A statistical measure representing the difference between an individual's performance or score on a test or scale at two different times.

Fight-Or-Flight Response

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival, triggering either aggression or escape.

Physiological Reactions

Body responses to stimuli or environmental changes, including hormonal, neural, and biochemical processes.