Post Utme Madonna University 2017 Economics Question 10

Practice objective / multiple choice question 10 from the 2017 Post Utme Madonna University Economics examination.

Post Utme Madonna University 2017 Economics Objective / Multiple Choice
Question 10 POST_UTME_MADONNA_UNIVERSITY • 2017 • ECONOMICS • objective

A government is considering a policy to reduce poverty in a particular region. The policy involves providing a subsidy to farmers to increase agricultural production. Assuming the subsidy is provided at a rate of 20% of the farmer's revenue, what will be the effect on the equilibrium price and quantity of the good?

Answer Options

Correct Answer A. The equilibrium price will decrease, and the equilibrium quantity will increase
B. The equilibrium price will increase, and the equilibrium quantity will decrease
C. The equilibrium price will remain unchanged, and the equilibrium quantity will increase
D. The equilibrium price will decrease, and the equilibrium quantity will remain unchanged
Correct Answer
A
Correct Option:
The equilibrium price will decrease, and the equilibrium quantity will increase

About This Question

This is Post Utme Madonna University 2017 Economics Question 10. It is one of the objective questions from the 2017 Post Utme Madonna University Economics examination.

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