If a positive externality is caused by producers, a Pigouvian subsidy would have to be given to producers; and if a positive externality is caused by consumers, a Pigouvian subsidy would have to given to consumers.
Answer the following statement true (T) or false (F)
False
Rationale: The statutory incidence of the subsidy is irrelevant -- as long as the subsidy is given to either consumers or producers, the economic incidence will be the same. And as long as it is set efficiently, it will result in the efficient output level.
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A leftward shift of a product supply curve might be caused by
A. an improvement in the relevant technique of production. B. some firms leaving the industry. C. a decline in the prices of needed inputs. D. an increase in consumer incomes.
Within the context of the housing market, what does MBS stand for?
a. Multi-Banking System b. Mortgage Backed Security c. Mortgage Bubble System d. Mixed Bracket Securities
Which of the following is an important real consequence of the public debt of the United States?
A. It will threaten to bankrupt the Federal government B. It discourages saving among the general public C. It decreases the inequality in the distribution of income in the U.S. D. Its consequent higher interest rates lead to fewer incentives to bear risk and innovate
Output is determined in
A) the goods market and also influences money demand and the interest rate. B) the money market and also influences money demand and the interest rate. C) the goods market with no influence from the money market. D) the money market with no influence on the goods market.