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When Comparing a Cash Subsidy and a Voucher Worth the Same

Question 59

Multiple Choice

When comparing a cash subsidy and a voucher worth the same dollar amount, but only good for the purchase of a single good:


A) a consumer can never be better off with a cash subsidy than with a voucher.
B) a consumer can never be better off with a voucher than with a cash subsidy.
C) a cash subsidy will always make the consumer better off than the consumer would be with a voucher.
D) a voucher will always make the consumer better off than the consumer would be with a cash subsidy.

Correct Answer:

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