One Way to Make Consumers Take a Negative Externality into Account

question 44

Multiple Choice

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

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

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Definitions:

Injustice

The situation or practice where fairness and rights are not upheld, often leading to unequal treatment or discrimination.

Positive Economic Statement

An objective statement based on facts that can be tested and validated.

Normative Economic Statement

A perspective or opinion in economics that reflects viewpoints on how the economy should work, as opposed to how it actually works.