A government subsidy
A) is a policy that can be used to help eliminate the deadweight loss from an external cost.
B) can help achieve an efficient amount of output when the good has an external benefit.
C) increases consumers' marginal benefit from the good.
D) Both answers A and C are correct.
E) Both answers B and C are correct.
B
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According to this Application, many economists believe that the increase in "globalization" in the last 30 years has ________ the ability of countries to levy taxes at rates that differ substantially from other countries
A) limited B) slightly increased C) greatly increased D) eliminated
If a group of economists believes the following points are true, which is likely to be their policy making stance?
? Aggregate demand shocks have no long run effect on real Gross Domestic Product (GDP) or unemployment. ? Pure competition is widespread throughout the economy. ? Real wages are flexible. ? The Phillips Curve trade-off does not exist in the long run. A) They will support discretionary policy making. B) They will support passive policy making. C) They will support active policy making. D) They will argue that any attempt at economic policy making is futile.