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.

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Definitions:

Free Association

A psychoanalytic technique in which the patient verbalizes thoughts as freely as they occur, without censorship.

Unconscious Thoughts

Mental processes occurring without conscious awareness, influencing feelings, judgments, and behaviors.

Transference

A phenomenon in psychoanalysis where patients project feelings about figures from their past onto their therapist.

Psychoanalysis

A therapeutic technique and theory of personality developed by Sigmund Freud, focusing on unconscious motivations and conflicts.