In a Market Economy, the Ideal Solution to the Problem

question 26

Multiple Choice

In a market economy, the ideal solution to the problem of externalities would be to:

• A) prohibit all production involving spillover costs.
• B) regulate both the amount people may consume and the price they pay for goods whose
• C) charge or tax producers of a good the precise marginal cost of the externality generated in production.
• D) offer subsidies to the industries causing a negative externality.

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Definitions:

Checkable Deposit

Deposits in bank accounts that can be withdrawn or transferred through checks, debit cards, or electronic means readily without restrictions.

Personal Balance Sheet

A financial statement that summarizes an individual's financial position at a certain point in time, showing assets, liabilities, and net worth.

Checking Deposit

A bank account that allows for the deposit and withdrawal of money for daily transactions, typically offering easy access through checks, ATMs, and electronic transfers.

Security

Measures or mechanisms that ensure the protection of data, resources, and systems from threats and unauthorized access.