Effective Methods of Dealing with Externalities Would Include

question 109

Multiple Choice

Effective methods of dealing with externalities would include

• A)taxing firms that generate beneficial externalities.
• B)imposing fines equal to the difference between MSC and MPC on firms that generate beneficial externalities.
• C)giving a subsidy per unit equal to the difference between MSC and MPC to firms that generate beneficial externalities.
• D)restricting the output of firms that generate beneficial externalities.

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Definitions:

Millimeters

A metric unit of length equal to one-thousandth of a meter.

Inches

A unit of linear measure in the Imperial and US customary systems, equal to 1/12 of a foot or 2.54 centimeters.

Conversion Formula

A mathematical equation used to change one set of units to another.

Pounds

A unit of weight in the imperial system, used primarily in the United States, equivalent to 0.453592 kilograms.