Government subsidies--as a technique for inducing firms to clean up their effluents--is attractive because it is costless.

Name: Government subsidies--as a technique for inducing firms to clean up their effluents--is attractive because it is costless.
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Question

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Government subsidies are not costless. The government has to allocate resources to fund these subsidies, which can come from tax revenue or borrowing, and there may be administrative costs associated with implementing and monitoring the subsidy program.

Government Subsidies--As a Technique for Inducing Firms to Clean Up