Answer:
D) Providing a Lump-sum subsidy is the correct option.
Explanation:
Solution:
D) Providing a Lump-sum subsidy is the correct option.
Because:
This is done so as to compensate the consumer for the loss in welfare occurred by an increase in price per unit tax on apples.
And due to this compensating variation provided to the consumer, the consumer is now at the same real income level as before the rise of price.
And hence it helps us to capture the substitution effect. The remaining effect would be the income effect.
Hence, the option d. providing a lump-sum subsidy is the correct option.
As the wage rate increases, the quantity of labor supplied by an individual worker will raise the quantity of labor supplied through the substitution effect.
For labor supply, the substitution effect is always positive.
It means that a higher wage rate always induces a greater quantity of labor supplied. For any worker, the substitution effect of a wage increament will always reduces the amount of leisure time consumed by him and increases the amount of time which is spent on working.
A higher wage thus produces a positive substitution effect on labor supply.
With the increase in the labor supply the supply curve for labor will move upward.
To know more about the labor supply here:
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<span>I would say A)minimum dollar amount that can be in an account wouldn't want an account with just a dollar in it, it would be a waste of time and space.</span>