If there are both external benefits and external costs associated with the production and consumption of a good, and the external benefits are greater than the external costs,
a. Taxing it could bring us closer to the efficient solution
b. Subsidizing it could bring us closer to the efficient solution
c. Neither a tax or a subsidy could bring us closer to the efficient solution
d. None of the above is true.
b
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What are the three monetary policy tools of the Fed? Briefly describe how each tool can be used to implement an expansionary monetary policy and a contractionary monetary policy
What will be an ideal response?
The monopolist's input demand curve is equal to its
A) variable cost curve. B) marginal cost curve. C) average cost curve. D) marginal revenue product curve.
In the long run, all of a firm's costs are variable. In this case the exit criterion for a profit-maximizing firm is to shut down if
a. price is less than average total cost. b. price is greater than average total cost. c. average revenue is greater than average fixed cost. d. average revenue is greater than marginal cost.
As it relates to the political process, the principal-agent problem results from the:
A. negative externalities that are created by some policy actions. B. political rules that encourage elected officials to engage in unethical and illegal behavior. C. inconsistency between voters' interest in programs and politicians' interest in reelection. D. paradox of voting.