​A Rain Barrel Is a Container That Captures and Stores

question 47

Multiple Choice

​A rain barrel is a container that captures and stores rainwater for landscape and garden use during dry periods. Rain barrels provide an external benefit to the community through water conservation. What can the government do to equate the equilibrium quantity of rain barrels and the socially optimal quantity of rain barrels?

• A)​impose a tax on rain barrels that is equal to the per-unit externality
• B)​offer a subsidy on rain barrels that is equal to the per-unit externality
• C)​encourage homeowners to bargain with rain barrel producers
• D)nothing​

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Definitions:

Machine Hours

A measure of production output based on the amount of time machinery is operated.

Number Of Employees

The total count of individuals employed by a company or organization, either full-time or part-time.

Step-down Method

A method used in cost accounting to allocate service department costs to producing departments, considering inter-departmental services.

Step-down Method

An accounting method used for allocating indirect costs to different departments based on a hierarchy where the first allocation base is the costliest department.