In an attempt to encourage the use of solar energy,the government pays a part of the price of solar panels to the producer and allows consumers to buy as many panels as they wish at the subsidized price.This is an example of a(n)_____.
A)excise subsidy
B)fixed-quantity subsidy
C)voucher program
D)lump-sum transfer

Question

Quizplus · Accepted Answer

An excise subsidy is a payment by the government to reduce the cost of a product or service, in this case, solar panels, to encourage production and consumption. This subsidy is not limited to a fixed quantity nor is it a lump-sum transfer to individuals or a voucher program; it directly reduces the production cost, making the product cheaper for consumers.

In an Attempt to Encourage the Use of Solar Energy,the