To internalize a negative externality:
a. a producer's costs could be reduced by an amount equal to the external cost resulting from the production of a good.
b. a producer's costs could be increased by an amount equal to the external cost resulting from the production of a good.
c. a producer could receive a subsidy equal to the external cost resulting from the production of a good
d. None of the above are correct.
b
You might also like to view...
Unemployment normally arises when:
A) labor markets are frictionless. B) wages are above the market clearing wage level. C) wages are below the market clearing wage level. D) wages are equal to market clearing wage level.
If stockholders allow the company to reinvest its profit, then
a. they will be personally liable for additional debts b. the company's stock price will rise c. the company's assets will decline d. these dividends will be distributed to the stockholders e. these profits can only be used to purchase equipment
Peter was recently hired as a salesman for a national consulting firm. His job involves spending a significant portion of his time out of the office visiting prospects and attending conferences. Which of the following is a strategy the consulting firm may employ to discourage Peter from shirking his responsibilities?
a. Tell Peter that the shareholders want to earn a large profit this year. b. Stop paying Peter bonuses based on how much he's sold. c. Allow Peter to set his own schedule and work from home frequently. d. Pay Peter an above-equilibrium wage.
Which of the following is not included in GDP as part of government services?
A.) Social Security benefits. B.) Military equipment. C.) Highways and bridges. D.) Education.