One way that the government encourages the production of a good with positive externalities is to offer
A) an effluent fee.
B) a market to pollute.
C) a subsidy.
D) a pollution tax.
Answer: C
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Refer to Pollutants. Suppose transactions costs are zero. Who should be made liable for the crop damage if the goal is to achieve an efficient outcome?
A chemical plant's production adds pollutants to a stream which irrigates a farm's crops. The pollutants damage the farm's crops, increasing the firm's costs by $800 per month. The crop damage may be eliminated in two ways: the chemical plant can install a new filtering system costing $300 per month, or the farm can install a new irrigation system costing $600 per month. a. The chemical plant should be made liable, because it is the source of the pollution. b. The chemical plant should be made liable, because it possesses the least-cost method of eliminating the externality. c. The farm should be made liable, because it can receive a bribe from the chemical plant. d. An efficient outcome will be achieved no matter who is made liable for the crop damage.
Refer to Figure 2-8. What is the opportunity cost of producing 1 ton of pineapples in Costa Rica?
A) 3/8 of a ton of coconuts B) 2/3 of a ton of coconuts C) 1 1/2 tons of coconuts D) 100 tons of coconuts
Which of the following is not possible?
a. Demand is elastic, and a decrease in price causes an increase in revenue. b. Demand is unit elastic, and a decrease in price causes an increase in revenue. c. Demand is inelastic, and an increase in price causes an increase in revenue. d. Demand is perfectly inelastic, and an increase in price causes an increase in revenue.
Even in the US, almost _____ percent of medical care is purchased through third party insurance.
a. 65 b. 75 c. 100 d. 50 e. 90