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:

Ethnic Minorities

Groups of people who differ in race or ethnicity from the majority population of a country or region.

Incidence

The rate at which new cases of a disease or condition occur in a specific population during a defined period.

High-Fat Diet

A diet that contains a high proportion of fat calories, often linked with increased risk for certain health conditions like heart disease.

Cholesterol Levels

The concentration of cholesterol in the blood, which is a key indicator of heart health, with high levels associated with increased risk of heart disease.