In Order for a Pigouvian Subsidy to Be Efficient, the Amount

question 11

True/False

In order for a Pigouvian subsidy to be efficient, the amount it costs the government to implement the subsidy must be less than the economic value of the additional externality benefits created by the subsidy.

---

Definitions:

Event

An occurrence or happening, especially one of significance, that can be observed or participated in.

Dependent

Relies on or is determined by another object, condition, or factor.

Independent Events

Two or more events where the occurrence of one does not affect the probability of the other(s).

Probability

A quantification of the probability that a given event will happen, usually represented as a numerical value ranging from 0 to 1.