A Government Action That Can Help Correct Positive Externalities Is

question 246

Multiple Choice

A government action that can help correct positive externalities is

• A) a tax on producers of the good that provides external benefits.
• B) a subsidy to consumers of the good that provides external benefits.
• C) an effluent fee charged to producers of the good that provides external benefits.
• D) regulations aimed at reduced production by sellers of the good that provides external benefits.

---

Definitions:

Common Stock

A security that evidences ownership in a corporation. A share of common stock gives the owner a proportionate interest in the corporation with regard to control, earnings, and net assets. Common stock is lowest in priority with respect to payment of dividends and distribution of the corporation’s assets on dissolution.

Proportionate Interest

The share or percentage ownership that an individual or entity holds in a particular asset, reflecting their portion of the total value or earnings.

Corporate Veil

A legal concept that separates the actions of a corporation from its shareholders, protecting them from being personally liable for the company's debts and obligations.

Bankruptcy

A legal proceeding involving a person or business that is unable to repay outstanding debts, resulting in the division of assets among creditors.