One Way to Make Consumers Take a Positive Externality into Account

question 122

Multiple Choice

One way to make consumers take a positive externality into account when making demand decisions is to:

• A)place a tax on the item.
• B)subsidize the purchase of the item.
• C)tax the producers of the item.
• D)None of these are true.

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Definitions:

Time Tickets

Documentation used to record the amount of time an employee spends on various tasks, contributing to labor cost tracking.

Unit Material Cost

The cost attributed to a single unit of production, including direct materials used in creating that unit.

Physical Units

A method of measuring output or production volume in a process costing system using actual physical units.

Total Costs

The complete sum of all expenses incurred by a business in producing goods or services, including fixed and variable costs.