Question

Question 1 A subsidy of $10 to consumers of a product increases efficiency since there is more trade occuring will decrease what a consumer pays by $10 still decreases efficiency since the marginal cost to some suppliers is highe than the marginal benefit to some consumers will reduce the quantity sold in the market Question 2 1 pts The difference between a wage subsidy and a minimum wage is that a subsidy decreases quantity whereas a minimim wage increases it The government is involved with one and not with the other a minimum wage is more efficient than a wage subsidy a subsidy increases the quantity of transactions whereas a minimum wage decreases it

Answer 1

1. Option 2

Explanation: The subsidy would lower the price for the buyer by the amount of the subsidy.

2. Option 4

Explanation: A subsidy would increase unemployment but a minimum wage would decrease employment.

3. Option 4

Explanation: A higher burden of the tax falls on the more inelastic side of the market.

4. Option 1

Explanation: A higher burden of the tax falls on the more inelastic i.e. less elastic side of the market.