Governments can most effectively encourage a firm to produce the efficient level of output of a good whose production causes a beneficial externality by
A. increasing the demand at every price for the good.
B. subsidizing the production of the good.
C. taxing the production of the good.
D. imposing a price ceiling on the good.
Answer: B
Economics
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A normative statement
A) depends on someone's values. B) cannot use the word "should." C) says what is currently believed about the way the world operates. D) must be tested to determine if it is correct. E) can be tested to determine if it is correct.
Economics
The money rate of interest that lenders pay for borrowed funds minus the real rate of interest equals the
a. nominal rate of interest. b. present value of an asset. c. inflationary premium. d. productivity of capital.
Economics