In the Case of a Negative Externality,in Order to Achieve

question 55

Multiple Choice

In the case of a negative externality,in order to achieve efficiency the government must set the _________________ equal to the marginal ____________________.

• A) tax; external costs
• B) tax; external benefits
• C) subsidy; external costs
• D) subsidy; external benefits
• E) tax; private costs

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Definitions:

Serotonin

A neurotransmitter that plays a crucial role in mood regulation, as well as influencing sleep, appetite, and digestion.

Endorphins

Natural pain-relieving and pleasure-inducing chemicals produced by the brain in response to stress or pain.

Aerobic Exercise

Aerobic Exercise is a type of physical activity that improves cardiovascular health by increasing the heart rate and oxygen consumption, typically involving sustained, rhythmic movements.

Positive Emotions

Feelings that are generally pleasant and desirable, such as joy, gratitude, serenity, and love, contributing to overall well-being.