When a Positive Externality Exists in the Production of a Good

question 168

Multiple Choice

When a positive externality exists in the production of a good,

• A)subsidizing the production of the good could correct for the externality.
• B)government could correct for the externality by shifting the good's supply curve to the left.
• C)an appropriate policy would result in a decrease in the price of the good.
• D)an appropriate policy would result in a decrease in the good's output.
• E)taxing the production of the good could correct for the externality.

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Definitions:

Operating Activities

Refers to the day-to-day tasks and transactions related to the central, ongoing functions of an entity, generating the primary revenue stream.

Operating ROA

A financial metric that measures the efficiency of a company's operations by dividing its operating income by its total assets, showing how well it generates income from its assets.

Return on Sales

A financial ratio that measures the efficiency of a company in generating profits from its revenue.

Tax Burden

The total amount of income, property, and sales taxes that an individual or business must pay to various governments.