In order to increase society's well-being, a process that produces a positive externality might be
a. taxed to discourage production
b. subsidized to encourage production
c. taxed to encourage production
d. subsidized to discourage production
e. provided without government intervention
B
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Refer to Figure 4-4. At the equilibrium price of $15 consumers are willing to buy 80 pounds of tiger shrimp. Is this an economically efficient quantity?
A) No, the marginal benefit of the 80th unit exceeds the marginal cost of the 80th unit. B) No, the marginal cost of the 80th unit exceeds the marginal benefit of the 80th unit. C) Yes, because marginal cost is zero at the 80th unit. D) Yes, because $15 is the price where the marginal benefit is equal to the marginal cost.
Refer to Figure 14.2. Hurricane Katrina was responsible for destroying a large portion of oil and natural gas refining capacity on the Gulf coast in 2005. Other things equal, this would best be represented by a movement from
A) point A to point B. B) point B to point A. C) point B to point C. D) point A to point C.
For the firm's cost minimization problem, one of the key assumptions for each input is that:
A) marginal product is constant. B) marginal product is increasing at a decreasing rate. C) marginal product is increasing at an increasing rate. D) marginal product is decreasing at an increasing rate.
The time span between the beginning of a downturn and the time by which hard data to indicate a downturn is made available is called:
a. the signal lag b. the implementation lag. c. the impact lag. d. the recognition lag.