All of the following are ways that the government can correct for positive externalities EXCEPT
A) by subsidizing the consumption of the good.
B) producing the good itself.
C) by regulation.
D) by assessing an effluent fee.
D
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Which of the following is NOT a commitment device?
A. A manufacturer's 2-year agreement to fix, at no cost to you, anything that breaks on your computer. B. A non-refundable advance payment to reserve a room at a resort. C. A pre-nuptial agreement that provides for a large penalty in the event a spouse has an affair. D. High fines for illegal parking on campus.
If a firm needs one machine to produce a product, and must replace the machine when it wears out, then the firm should pick a durability level of the machine that
A) minimizes the expense today. B) minimizes the present discounted cost of having the machine forever. C) maximizes the future value of the machine. D) minimizes the future value of the machine.
If aggregate demand curve shifts from AD2 to AD1, the full multiplier effect on real GDP will be a decrease from:
Refer to the figure above.
A. Q3 to Q1
B. Q2 to Q4
C. Q2 to Q1
D. Q3 to Q4
The main advantage of trade between two countries is that
A. employment in both countries will increase. B. trade will lead to a more equitable distribution of income in both countries. C. both countries have consumption choices beyond their current resource and production constraints. D. trade makes both countries more self-sufficient.