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A Subsidy May Be Used as a Corrective Device in the Case

question 27

Multiple Choice

A subsidy may be used as a corrective device in the case of a positive externality because it will __________ marginal private benefits and __________ demand.


Definitions:

4WD

Four-Wheel Drive, a drive system where torque is supplied to all four wheels of the vehicle for improved traction.

High-Performance

Refers to vehicles or components designed for enhanced speed, power, and handling capabilities beyond standard specifications.

Luxury

A state or condition of great comfort, opulence, and extravagant living.

Economy

A system of production, distribution, and consumption of goods and services within a particular geographical area.

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