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To Make Child Daycare More Affordable,government Advisors Are Debating Two

Question 43

Multiple Choice

To make child daycare more affordable,government advisors are debating two possible options.Plan A is to give daycare centers a $100 subsidy per month per child.Plan B is to give the parents $100 reduction in taxes per month per child in daycare.Which plan benefits parents more?


A) Plan A because it will increase the supply of childcare and decrease the price.
B) Plan B because the $100 goes directly to the parents.
C) The plans are equivalent in terms of their impact on the price minus subsidy paid by parents.
D) Plan A because the price will fall,while under Plan B the price will rise.

Correct Answer:

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