Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
True
B
False
Understanding the Answer
Let's break down why this is correct
Answer
Government subsidies are financial support that the government gives to certain industries to help them succeed. While these subsidies can lower prices for consumers, making goods more affordable, they do not always lead to greater market efficiency. For example, if a government subsidizes corn production, it may encourage farmers to grow more corn than is actually needed, leading to overproduction. This can waste resources and disrupt the balance of supply and demand. Therefore, while subsidies can help some consumers in the short term, they can also create long-term inefficiencies in the market.
Detailed Explanation
Subsidies do not always help. Other options are incorrect because Many think subsidies help all the time.
Key Concepts
Government Subsidies
Market Efficiency
Consumer Behavior
Topic
Government Subsidies and Market Effects
Difficulty
medium level question
Cognitive Level
understand
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