Which of the Following Is a Safety Net That Could

question 38

Multiple Choice

Which of the following is a safety net that could provide a decent standard of living and/or incentives to work?

• A) government-subsidized school lunches and breakfasts
• B) Low Income Home Energy Assistance Program
• C) the Special Supplemental Food Program for WIC
• D) Supplemental Security Income and the above

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Definitions:

Socially Optimal

A situation in economics where resources are allocated in the most efficient way from a societal perspective.

Pigouvian Tax

A tax imposed on activities that generate negative externalities, intended to correct an undesirable or inefficient market outcome by being equal in value to the externality.

Positive External Benefits

benefits that result from a product or service's use that affect someone other than the direct buyer or seller, often leading to social gains.

Optimal Amount

The quantity of a good or service that achieves the best possible balance between costs and benefits.