If Production of a Good Produces an External Benefit, in Order

question 107

Multiple Choice

If production of a good produces an external benefit, in order for the marginal social cost to equal the marginal social benefit

• A) the good should be taxed.
• B) permits should be required to purchase the good.
• C) the good could be subsidized.
• D) the government needs to take no action.

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Definitions:

Manufacturer

A manufacturer is a person or company that makes goods for sale, especially on a large scale, involving processes like designing, fabricating, and marketing.

Conditional Sale Agreement

A contract for the sale of goods where the purchase price is paid in installments and the ownership of the goods is transferred to the buyer only after all payments have been made.

Provincial Legislation

Laws enacted by the legislative assemblies of provinces in countries with a federal system of government.

Registration

The act of officially recording information or data into a formal system or registry, often necessary for legal recognition or validity.