If a subsidy was imposed on an industry whose production imposed external benefits on others, then the goods' consumers of the good would be ____ and the result would be a(n) ____ in efficiency.
A)better off; increase.
B)better off; decrease.
C)worse off; increase.
D)worse off; decrease.

Question

If a subsidy was imposed on an industry whose production imposed external benefits on others, then the goods' consumers of the good would be ____ and the result would be a(n) ____ in efficiency.
A)​better off; increase.
B)​better off; decrease.
C)​worse off; increase.
D)​worse off; decrease.

Quizplus · Accepted Answer

Subsidies on industries with external benefits help to lower the cost of production or increase the supply of the good, making it more accessible or affordable to consumers, thus they are better off. Additionally, by aligning private costs with social benefits, subsidies can correct for the underproduction of goods with positive externalities, leading to an increase in efficiency.

If a Subsidy Was Imposed on an Industry Whose Production