If the production of a good generates external benefits, the government could increase efficiency by
A. regulating production of the good to reduce the amount produced.
B. requiring all producers of the product to be licensed to produce the product.
C. subsidizing production of the good to increase the amount produced.
D. taxing the production of the good to reduce the amount produced.
Answer: C
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Max has allocated $100 toward meats for his barbecue. His budget line and indifference map are shown in the above figure. If the price of burger increases, which of the following bundles are in Max's opportunity set?
A) b, d, e B) d, e C) a, b, c, d, e D) None of the labeled points are in Max's opportunity set.
Over the last ten years productivity grew more slowly in Iberia than in Aire while the population and total hours worked remained the same in both countries. It follows that
a. real GDP per person must be lower in Iberia than in Aire. b. real GDP per person grew more slowly in Iberia than in Aire. c. the standard of living must be higher in Iberia than in Aire. d. All of the above are correct.