A Pigouvian Subsidy Is

question 180

Multiple Choice

A Pigouvian subsidy is:

• A)designed to discourage activities generating externalities.
• B)designed to encourage activities generating external benefits.
• C)appropriate when the marginal social cost curve is above the marginal cost of production curve.
• D)appropriate when the marginal social cost curve and the marginal social benefit curve intersect at an inefficient level.

Understand the concept and application of motivation in psychology.

Identify the evolution of motivation theories, including instinct approaches.

Describe the role of homeostasis in drive-reduction theory.

Explain the distinction between primary and secondary drives.

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Definitions:

Price Elasticity of Demand

Price elasticity of demand measures how the quantity demanded of a good or service changes in response to a change in its price, indicating its sensitivity to price changes.

Unitary

A property of elasticity where a change in price causes a proportional change in the quantity demanded or supplied, with an elasticity coefficient of 1.

Incidence

Refers to the impact or burden of a tax, how it is distributed among various participants in the market.

Price Elasticity of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, quantitatively defined as the percentage change in quantity supplied divided by the percentage change in price.