A Level Economics (9708)•9708/13/M/J/22

Explanation
Producer subsidies support production, not consumer welfare.
Steps:
- Define producer subsidy as financial aid to firms or individuals to encourage output of goods/services.
- Review options: Identify which provide direct production incentives versus general consumption support.
- Classify A, B, C as aiding producers (farmers/pharma) in supply or development.
- Confirm D aids consumers (unemployed) in purchasing, not producing.
Why D is correct:
- Producer subsidies target output incentives per economic policy definitions; D is a consumer subsidy or unemployment benefit enabling purchases, not production.
Why the others are wrong:
- A: Direct grant to farmers covers production losses, ensuring supply—a classic producer subsidy.
- B: Minimum price guarantee stabilizes farmer income for ongoing production—a price support subsidy.
- C: Funding for vaccine development aids pharmaceutical production innovation—a targeted producer incentive.
Final answer: D
Topic: Methods and effects of government intervention in markets
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