Figure: Negative Externalities and Raising Pigs for Pork

question 172

Multiple Choice

Figure: Negative Externalities and Raising Pigs for Pork (Figure: Negative Externalities and Raising Pigs for Pork) Refer to the figure Negative Externalities and Raising Pigs for Pork.If the socially optimal production of pigs is 250, the government could achieve this socially optimal production by imposing a Pigouvian tax of:

• A)$400.
• B)$300.
• C)$250.
• D)$200.

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Definitions:

Subsistence Level

The minimum level of resources (income and goods) that is considered adequate to maintain the livelihood of an individual or household.

Thomas Robert Malthus

An English cleric and scholar, influential in the fields of political economy and demography, known for his theory on population growth.

Standard of Living

The standard of living refers to the degree of wealth, comfort, material goods, and necessities available to a person or community.

Saving Rate

The portion of income that is not spent on consumption but instead is saved or invested.