Economist A

question 181

Essay

Economist A.C.Pigou argued that to deal with a negative externality in production, the government should impose a tax equal to the cost of the externality.What did Pigou believe should be done in the case of a positive externality in consumption? How would his recommendation impact the demand and market equilibrium for the product which is generating the positive externality?

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Definitions:

Distal End

The farthest point from the center of the body, or the point farthest from the point of attachment of a limb or structure.

Upper Limb

The portion of the human body that extends from the shoulder to the hand, including the arm, forearm, wrist, and fingers.

Carpal Tunnel

A narrow passageway in the wrist through which the median nerve and tendons pass.

Symphysis Pubis

Symphysis Pubis is a fibrocartilaginous joint located between the left and right pubic bones near the front of the pelvis, providing limited movement to accommodate childbirth.