When a Positive Externality Exists in a Market, the Distribution

question 35

Multiple Choice

When a positive externality exists in a market, the distribution of surplus received from a subsidy depends on:

• A)how the subsidy is distributed among those affected by the externality.
• B)whether those who are affected by the externality receive its true value.
• C)where the government obtains the money it uses to pay for the subsidy.
• D)None of these are true.

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Definitions:

BPR

Business Process Re-engineering, a strategy for making an organization's business processes more efficient and effective.

Manufacturing

The process of using tools, machinery, and labor to produce goods for sale, typically on a large scale.

Logistics

The detailed coordination of a complex operation involving many people, facilities, or supplies, in the context of moving and housing goods from point of origin to point of consumption.

Process Activities

The series of actions or steps taken in order to achieve a particular end in a process.