Figure 4-13
Refer to . The supply curve S and the demand curve D1 indicate initial conditions in the market for flu shots. A new government program is implemented that grants buyers a $25 subsidy when they buy a flu shot, shifting the demand curve from D1 to D2. Which of the following is true for this subsidy given the information provided in the figure?
a.
The original price of a flu shot was $75, and after the subsidy, it rises to $90.
b.
$65 represents the net price a buyer must pay for a flu shot after taking into account the subsidy payment.
c.
Buyers of flu shots will receive an actual benefit of $10 from the subsidy, while sellers of flu shots will receive an actual benefit of $15 from the subsidy.
d.
All of the above are true.
d
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Which of the following provides the best explanation of why money is valuable?
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