If an Activity Generates a Positive Externality, the Government Can

question 115

Multiple Choice

If an activity generates a positive externality, the government can increase total economic surplus by ________ the activity, and if an activity generates a negative externality, the government can increase total economic surplus by ________ the activity.

• A)taxing; banning
• B)subsidizing; banning
• C)subsidizing; taxing
• D)publicizing; taxing

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Definitions:

Occupational Groups

Categories of jobs that involve similar tasks and require similar skills, training, education, or qualifications.

Production Possibilities Curve

A graphical representation showing the maximum combination of goods or services that can be produced with a given set of resources and technology, assuming efficient use of resources.

Generating and Storing Solar Energy

The process of converting sunlight into electricity and storing that energy for later use.

Mandatory Retirement

A policy or rule that requires employees to retire at a certain age regardless of their wish or capability to continue working.