If the government wants to increase economic efficiency, it should:
A)never tax goods.
B)never subsidize goods.
C)tax goods that entail positive externalities.
D)subsidize goods that entail positive externalities.

Question

Quizplus · Accepted Answer

If a good entails a positive externality, then the government can increase total economic surplus by subsidizing the good.

If the Government Wants to Increase Economic Efficiency, It Should