To correct a positive externality problem, the government can impose
A) a subsidy to decrease the marginal private benefits.
B) a subsidy to increase the marginal private benefits.
C) a tax to increase the marginal social benefits.
D) a tax to decrease the marginal social benefits.
E) either a tax or a subsidy to change the marginal social benefits.
Correct Answer:
Verified
Q133: If government associates an external cost with
Q134: To correct a negative externality problem, the
Q135: When the government uses a subsidy in
Q136: A government-granted license to pollute that can
Q137: In reality, it is more difficult to
Q139: If government associates an external benefit with
Q140: A new idea in pollution control that
Q141: Models of government that propose that individuals
Q142: Describe how the RECLAIM tradable permit program
Q143: Tradable permits are a new idea but
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents