Encouraging Firms to Increase Production Via a Subsidy Will Tend

question 91

Multiple Choice

Encouraging firms to increase production via a subsidy will tend to be socially optimal when:

• A)the firms are producing necessities
• B)there is excess supply in the market
• C)the firms output is associated with large technology spillovers
• D)the market equilibrium output level is greater than the social optimum

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Definitions:

Absolute Threshold

The minimum intensity of a stimulus that one can perceive or detect 50% of the time.

Perceptual Invariance

The ability to recognize objects as remaining the same under different conditions, such as changes in lighting, angle, or distance.

Action Potentials

The rapid rise and fall of electrical voltage across a cell's membrane, allowing neurons to transmit signals along their axons.

Inhibitory Synapses

Connections between neurons that decrease the likelihood of the firing action potential of receiving neuron, thus inhibiting neural activity.