Due to a Firm Generating External Costs, the Government Decides

question 243

Multiple Choice

Due to a firm generating external costs, the government decides to ________ the firm. When this happens, the firm will produce ________ units of output than before the tax was imposed in order to continue maximizing profits.

• A) subsidize; fewer
• B) subsidize; more
• C) tax; fewer
• D) tax; more

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Definitions:

Inferiority Feelings

Emotions or perceptions of being lesser or inadequate in comparison to others or one's ideals, often discussed in the context of social comparison and personal development.

Genetically Determined

Traits or characteristics that are passed down from parents to offspring through genes.

Unsettled Conflicts

Issues or disagreements that have not been resolved, potentially leading to ongoing tension or stress.

Organic Inferiority

A concept introduced by psychologist Alfred Adler, referring to the perceived or actual physical weaknesses that can lead to feelings of inadequacy and compensatory striving for superiority.