When a Positive Externality Is Present in a Market,total Surplus

question 112

Multiple Choice

When a positive externality is present in a market,total surplus is:

• A) higher when buyers receive a Pigouvian subsidy for the externality.
• B) lower when buyers receive a Pigouvian subsidy for the externality.
• C) higher when buyers only consider private benefits.
• D) Any of these statements could be true.

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Definitions:

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French Republic

The official name of France as a democratic country, established in 1792 after the overthrow of the monarchy, currently in its Fifth Republic initiated in 1958.

French Army

The land-based military force of France, established in the early modern period, known for its pivotal roles in European and global conflicts throughout history.

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