In the problem when the price of gasoline is 2$ per gallon, Joe consumes 1000 gallons per year, then the price goes up to 2,50$ and the government gives him a cash transfer of 500$ per year. Is this a subsidy or a coupon?

Why will joe be better off after the price rise and the cash transfer? How does it affect his gasoline consumption? Assuming that his MRS of gasoline for other goods is diminishing