When the production of one good spills benefits over to third parties, the government should consider all of the following EXCEPT
A) subsidizing the consumption of the good.
B) subsidizing the production of the good.
C) creating tax incentives to encourage more consumption.
D) taxing the production or consumption of the good.

Question

Quizplus · Accepted Answer

When the production of one good spills benefits over to third parties, it creates positive externalities. The government typically encourages such production or consumption through subsidies or tax incentives, not by taxing it, which would discourage its production or consumption.

When the Production of One Good Spills Benefits Over to Third