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:

Blood Ph

The measure of acidity or alkalinity of blood, maintained within a very narrow range, essential for physiological processes.

Nitrogenous Wastes

Waste products containing nitrogen, such as urea and ammonia, excreted by living organisms.

Nephrons

The basic structural and functional units of the kidney, responsible for filtering blood and creating urine.

Kidney

An organ in vertebrates responsible for filtering waste products from the blood and excreting them in urine, as well as maintaining electrolyte balance.