If the government wishes to correct the existence of a negative externality, it could

A) grant subsidies to consumers to stimulate demand.
B) impose a tax on the producers to reduce supply.
C) impose taxes on consumers to stimulate demand.
D) grant subsidies to producers to reduce supply.

Answer: B

Economics

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The primary differences in economic structure among different countries relate to ownership of resources and the manner in which economic activities are coordinated

a. True b. False

Economics

When Cody went to the physician with a sore elbow, after hearing Cody's symptoms and examining the elbow manually, Cody's physician had two options: (1) prescribe an anti-inflammatory drug and advise Cody to abstain from vigorous physical activity for a period; or (2) advise Cody to undergo a magnetic resonance imaging (MRI) exam, a costly diagnostic procedure. Which of the following physicians is more likely to recommend option 2?

A. A physician who is concerned about the marginal cost of an MRI. B. All physicians would recommend option 2. C. A physician who is compensated under a conventional health insurance plan. D. A physician who is part of an HMO.

Economics