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

Economists argue that giving low-income individuals the same amount of money as a subsidy on a specific product would result in them having increased utility because they could use the money as they choose. This is because giving individuals a specific subsidy takes away their ability to make efficient choices regarding their spending, which is key to maximizing welfare.

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