If the Government Wishes to Correct the Existence of Positive

question 145

Multiple Choice

If the government wishes to correct the existence of positive externality, it could

• A)grant subsidies to consumers to stimulate demand.
• B)impose a tax on the producers to stimulate supply.
• C)impose taxes on consumers to stimulate demand.
• D)grant subsidies to producers to reduce supply.

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Definitions:

Direct Labor Dollar

The total cost of wages paid to workers who are directly involved in the production of goods or delivery of services.

Rent Expense

The cost incurred for leasing or renting property or equipment, considered an operating expense in accounting.

Supervision Expense

Supervision expense refers to the cost associated with overseeing and managing workers or operations within a business.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.