Economic Analysis of Social Issues 1st Edition by Alan Grant

Exercise 9

A subsidy is the opposite of a tax. When a government taxes the sale of avocados, cooperative surplus decreases, and society gets poorer. Therefore, when a government subsidizes the sale of avocados, ________.
A) Cooperative surplus increases, and society gets richer
B) Cooperative surplus decreases, and society gets poorer
C) Cooperative surplus increases, but society gets poorer
D) Cooperative surplus doesn't change, but society gets richer