Suppose That a Per-Unit Subsidy Is Granted to Each Individual

question 24

Multiple Choice

Suppose that a per-unit subsidy is granted to each individual who consumes a product providing external benefits to society at large. Each individuals demand curve will shift ________, and the market demand curve for the product will shift ________.

• A) to the right; to the right
• B) to the right; to the left
• C) to the left; to the left
• D) to the left; to the right

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Definitions:

Reward

A stimulus or event that increases the likelihood of a behavior being repeated, often pleasant or beneficial in nature.

Incentive Motivation

A theory suggesting that behavior is motivated by a desire for external rewards or incentives.

External Arousal

The state of being mentally and physically stimulated or activated by external environmental factors or stimuli.

Reward

A beneficial outcome or positive stimulus that increases the likelihood of a behavior being repeated through the process of reinforcement.