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Which of the Following Is a Solution to Externalities

Question 128

Multiple Choice

Which of the following is a solution to externalities?


A) The city government imposes rent control. The externality is that housing's quantity demanded exceeds the quantity supplied at the current price.
B) The federal government imposes a minimum wage. The externality is that firms pay too little to their workers.
C) The government offers free childhood immunizations. The externality is that an immunized child cannot transmit disease to others.
D) The federal government provides national defense. The externality is that people can't be excluded from national defense even if they don't pay for it.

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