Subsidies

What is the main goal of subsidies?

• Increase production
• Decrease demand
• Increase taxation
• Limit market failure

Which of the following is a benefit of subsidies?

• Increase government revenue
• Help producers reduce costs
• Decrease supply
• Increase inefficiencies

How do subsidies affect the supply curve?

• Shift it to the left
• Shift it to the right
• Keep it unchanged
• Flatten the curve

What is a potential disadvantage of subsidies?

• They encourage innovation
• They require government spending
• They decrease DWL
• They limit supply

What happens to consumer prices when subsidies are applied?

• They increase
• They decrease
• They remain unchanged
• They fluctuate randomly

Which stakeholder benefits directly from subsidies?

• Producers
• Importers
• Foreign governments
• Competitors

How do subsidies influence demand?

• Increase demand by lowering prices
• Decrease demand by raising prices
• Eliminate demand
• Have no effect on demand

What is DWL in the context of subsidies?

• A measure of consumer surplus
• A form of government profit
• Misallocation of resources
• Deadweight labour loss

In which market are subsidies most often discussed?

• Labour markets
• Green energy
• Arms trading
• Luxury goods

Which of the following is a common criticism of subsidies?

• They are temporary
• Make products unaffordable
• They create market inefficiencies
• They are always progressive