Use the Table Below to Answer the Following Questions

question 85

Multiple Choice

Use the table below to answer the following questions.
Table 16.2.1

-Refer to Table 16.2.1. Given in the table are the marginal private cost and the marginal social cost of the production of chemical fertilizer and the marginal social benefit from the consumption of fertilizer. If the government decides to correct the externality problem, it could

• A)subsidize production by $20 per unit.
• B)subsidize production by $10 per unit.
• C)provide the good itself.
• D)tax production by $10 per unit.
• E)tax production by $20 per unit.

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Definitions:

Productive Resources

Inputs used in the production of goods and services, including land, labor, capital, and entrepreneurship.

General Level Of Prices

An average or aggregate measure of prices for goods and services in an economy, often used to assess inflation or purchasing power.

Shares Of Stock

Units of ownership interest in a corporation or financial asset that provide an equal distribution in any profits, if any are declared, in the form of dividends.