In the case of externalities, government can use taxes and subsidies to turn an inefficient outcome into an efficient outcome

Based on the data in the above table, to assure that the efficient amount is produced the government can

A) subsidize the suppliers $8 per unit. B) subsidize the suppliers $2 per unit. C) tax suppliers $2 per unit. D) tax suppliers $8 per unit.

In order to prove that Coca Cola and 7-Up are substitutes, one should test the __________ and get a __________

a. price elasticity of demand; number less than negative 1 b. income elasticity; positive number c. cross-price elasticity; negative number d. price elasticity of demand; number greater than negative 1 e. cross-price elasticity; positive number