To Internalise a Positive Externality, an Appropriate Public Policy Response

question 34

Multiple Choice

To internalise a positive externality, an appropriate public policy response would be to

• A) ban the good creating the externality.
• B) tax the good.
• C) subsidise the good.
• D) have the government produce the good until the value of an additional unit is zero.

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Definitions:

Prescription

A written order from a licensed healthcare provider that authorizes a patient to be issued with a specific medication or treatment.

Enema

A procedure involving the introduction of liquid into the rectum to cleanse or administer drugs.

Narcotic

A narcotic is a substance that affects mood or behavior, sold for nonmedical purposes, especially an illegal drug or medically used for pain relief.

Every Hour

A frequency indication meaning an action or event occurs once each hour.