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Betsy Loves to Garden, and Her Rose Garden Is Enjoyed

Question 131

Multiple Choice

Betsy loves to garden, and her rose garden is enjoyed by everyone in her neighborhood.Because her consumption of rosebushes provides a positive externality to the community, the government should:


A) provide gardeners like Betsy a subsidy because the market quantity of rosebushes is greater than the socially optimal quantity.
B) impose a tax on gardeners like Betsy because the market quantity of rosebushes is lower than the socially optimal quantity.
C) provide gardeners like Betsy a subsidy because the market quantity of rosebushes is lower than the socially optimal quantity.
D) impose a tax on gardeners like Betsy because the market quantity of rosebushes is greater than the socially optimal quantity.

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