Economists usually do not favor subsidies on specific products or in-kind payments to help low income people.This is because
A)A subsidy means that the recipient does not face a budget line anymore and therefore can not maximize his welfare efficiently
B)Economists are individualists who believe that helping the needy makes them dependent
C)The poor person could have increased utility if the same money used to subsidize a product would be given to them to use as they choose
D)In-kind payments suggest that the poor person does not have an indifference curve pattern from which to make choices

Question

Quizplus · Accepted Answer

The poor person could have increased utility if the same money used to subsidize a product would be given to them to use as they choose. Economists generally prefer cash transfers as they provide the recipient with the greatest flexibility in choosing how to use the money to maximize their welfare. In-kind transfers restrict the options of the recipient and may not align with their preferences or needs. Additionally, subsidies can distort market prices and lead to inefficient allocation of resources.

Economists Usually Do Not Favor Subsidies on Specific Products or In-Kind