Which of the Following Statements Is True

question 177

Multiple Choice

Which of the following statements is true?

• A)A tax applied to an activity that generates a negative externality always brings about the socially optimal level of output.
• B)A subsidy applied to an activity that generates a positive externality always brings about the socially optimal level of output.
• C)a and b
• D)none of the above

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Definitions:

Highly Attractive

Describing something or someone that has a great appeal or allure, often visually, but can also pertain to personality or traits.

Door-In-The-Face Technique

A persuasion strategy where a large, unreasonable request is made first and, if refused, followed by a smaller, more reasonable request.

Juvenile Delinquents

Youths who engage in behavior that is against the law, often viewed from the perspective of prevention, intervention, and rehabilitation.

Prisoner's Dilemma

A theoretical game in decision theory where two individuals acting in their own self-interest do not produce the optimal outcome.