The Effect of a Government Subsidy in a Market Where

question 119

Multiple Choice

The effect of a government subsidy in a market where a positive externality is present is:

• A) to increase surplus.
• B) to increase efficiency.
• C) to make consumers internalize the external benefit.
• D) All of these statements are true.

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Definitions:

Administrative Hearing

A legal proceeding before an administrative agency which provides a mechanism for resolving disputes involving the agency's decisions.

Cross-Examine Witnesses

A legal process where a witness, after being questioned by one party, is questioned by the opposing party in a court of law to scrutinize the validity of their testimony.

Environmental Protection Agency

A government agency charged with enforcing laws that protect the environment and public health.

Issue a Formal Complaint

The process of officially filing a grievance or accusation against a party, often in a regulatory or legal context.