Which Policy Does the Economics of Externalities Suggest Would Encourage

question 114

Multiple Choice

Which policy does the economics of externalities suggest would encourage an efficient quantity in the corresponding market?

• A) subsidizing polluting factories
• B) subsidizing beautiful flower beds in public spaces
• C) taxing convenient benches set up in public spaces
• D) taxing healthy food

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Definitions:

Long-Run

A period in economics during which all factors of production and costs are variable, allowing full adjustment to change.

Indifference Principle

A concept in economics that suggests a consumer has no preference between two bundles of goods because both provide the same level of utility or satisfaction.

Housing Prices

The monetary value assigned to residential properties, influenced by factors like location, demand, and economic conditions.

Living Conditions

The environmental and social factors impacting the day-to-day life and wellbeing of people.