Which of the following statements is true?
A)Consumers are better off with a fixed-quantity subsidy than an equal-cost voucher system.
B)Voucher systems will not increase the quantity consumed of the subsidized good.
C)With a fixed-quantity subsidy consumers will consume more of other goods.
D)Fixed-quantity subsidies and voucher systems can both place the consumer on a higher indifference curve.

Question

Quizplus · Accepted Answer

Both fixed-quantity subsidies and voucher systems can increase the consumer's purchasing power, allowing them to consume more of the subsidized good and potentially increasing their overall utility. As a result, both options can place the consumer on a higher indifference curve. A fixed-quantity subsidy provides a specific quantity of the subsidized good at a subsidized price, while a voucher system provides a set amount of funds that can be used to purchase the subsidized good or other products. The choice between the two options depends on the specific goals and constraints of the subsidy program.

Which of the Following Statements Is True