Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Indian Economy:1950-1990

Question:
How do subsidies for water and electricity affect their usage?
Options:
They encourage efficient use of resources.
They result in inefficient resource usage.
They have no impact on resource usage.
None of the above
Correct Answer:
They result in inefficient resource usage.
Explanation:
They result in wasteful usage without considering scarcity. When water and electricity are subsidized or provided for free, they are used wastefully without concern for their scarcity. This leads to inefficient resource usage.