Why do the United States and the European Union governments apply tariffs to solar panel imports, even though solar panels generate positive consumption externalities?
a. They believe that imported solar panels' negative consumption externalities outweigh their positive consumption externalities.
b. They believe that domestic production of solar panels generates negative production externalities that outweigh the positive consumption externalities from imports.
c. They believe that domestic production of solar panels generates positive production externalities that outweigh the positive consumption externalities of imports.
d. They believe that imported solar panels negative production externalities outweigh their positive consumption externalities.
Ans: c. They believe that domestic production of solar panels generates positive production externalities that outweigh the positive consumption externalities of imports.
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