To Correct a Negative Externality Problem, the Government Can Impose

question 172

Multiple Choice

To correct a negative externality problem, the government can impose

• A)a subsidy to increase the marginal private costs.
• B)a subsidy to increase the marginal social costs.
• C)a tax to increase the marginal private costs.
• D)a tax to increase the marginal social costs.
• E)either a tax or a subsidy to change the marginal social costs.

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Definitions:

MRO Inventories

MRO Inventories refer to stocks of Maintenance, Repair, and Operations supplies that are kept on hand to support the production process and facility operations.

ABC Inventory Analysis

A technique that categorizes inventory items into three classes (A, B, and C) based on their importance and value to the organization, to prioritize management and control efforts.

ABC Analysis

is an inventory categorization technique that divides items into three categories (A, B, and C) based on their importance or value, helping to prioritize management and resource allocation.

Economic Order Quantity Model

A mathematical model that determines the optimal order size that minimizes the total cost of holding and ordering inventory.