Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A government subsidy for electric vehicles increasing their adoption rates, leading to reduced air pollution.
B
A tax on sugary drinks that discourages their consumption.
C
A fixed price support for wheat that benefits farmers directly.
D
A regulation that limits the amount of waste produced by companies.
Understanding the Answer
Let's break down why this is correct
Answer
Consumption subsidies are financial support given by the government to encourage people to buy certain products or services that have benefits for society, known as positive externalities. For example, when the government provides a subsidy for electric cars, it makes them cheaper for consumers, which can lead to more people buying them. This is effective because electric cars reduce pollution and help fight climate change, benefiting everyone, not just the car owners. By making these cars more affordable, the subsidy increases their use, leading to a cleaner environment. Thus, consumption subsidies help promote goods that are good for society, addressing the positive effects they bring.
Detailed Explanation
When the government gives money to help people buy electric cars, more people choose them. Other options are incorrect because A tax on sugary drinks makes people buy less of them, but it doesn't help anyone directly; Supporting wheat prices helps farmers, but it doesn't create a benefit for the public.
Key Concepts
consumption subsidies
policy effectiveness.
Topic
Subsidies for Positive Externalities
Difficulty
medium level question
Cognitive Level
understand
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