When an Industry Is Characterized by Technology Spillover, What Should

question 385

Multiple Choice

When an industry is characterized by technology spillover, what should the government do to ensure that the market equilibrium equals the socially optimal equilibrium?

• A)Impose a tax greater than the value of the technology spillover.
• B)Not allow production of any product that causes a technology spillover.
• C)Provide a subsidy equal to the value of the technology spillover.
• D)Require producers to "clean up" any spillover that results from their production process.

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Definitions:

Chattel Paper

A document or records indicating both a monetary obligation and a security interest in or lease of specific goods.

Collateral

Assets or property offered as security for a loan, to be forfeited in the event of default.

Perfected Purchase

A legal status in property law where the buyer obtains the rights to the property free from any prior claims or liens.

Money Security Interest

A legal claim or lien on collateral (such as cash or deposit accounts) provided by a debtor to secure a loan or other credit, ensuring the lender has a priority claim over the funds in the case of default.