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
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How are a firm's short-run and long-run average cost curves related?
a. SRAC is greater than LRAC, which forces the LRAC curve to be upward sloping. b. SRAC and LRAC slope up or down together, but SRAC is always the steeper of the two curves. c. The SRAC curve is tangent to and lies above the LRAC curve. d. The LRAC curve just touches the SRAC curve at its minimum point.
Which of the following is not a source of technological advancement for a producer?
A) more efficient physical capital B) outsourcing some aspect of production C) higher skill level of managers D) better trained workers
An open market purchase of bonds by the Fed
a. will shift the money supply curve to the left. b. will drain reserves from the banking system and shift the money supply curve to the right. c. will inject reserves into the banking system and shift the money supply curve to the left. d. will shift the money supply curve to the right. e. will change the slope of the money supply curve.
When inflation occurs
A. money gains in value. B. money loses value. C. the value of money is unaffected. D. the value of demand deposits falls but the value of currency is unaffected. E. inflation has nothing to do with money.