Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A farmer receives a subsidy for planting trees, which increases carbon absorption and reduces pollution.
B
A factory reduces its production costs by cutting safety measures, leading to more accidents.
C
A company raises its prices to cover the costs of new regulations imposed by the government.
D
A consumer decides to buy a hybrid car due to its lower fuel costs compared to traditional vehicles.
Understanding the Answer
Let's break down why this is correct
Answer
Government subsidies are financial support from the government to encourage certain activities or behaviors that can lead to positive outcomes for society. For example, when the government gives money to farmers who grow organic food, it helps lower the cost of organic produce. This can lead to more people buying healthy food, which improves public health and reduces healthcare costs. In this case, the subsidy corrects the externality of poor health caused by unhealthy eating habits, making organic food more accessible. By supporting farmers, the government not only helps the economy but also promotes a healthier environment for everyone.
Detailed Explanation
The farmer gets money to plant trees. Other options are incorrect because This option shows a factory cutting safety, which creates more harm; Here, a company raises prices due to new rules.
Key Concepts
Government Subsidies
Externalities
Market Failures
Topic
Government Subsidies and Externalities
Difficulty
easy level question
Cognitive Level
understand
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