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:

Confidence

The feeling of trust in one's abilities, qualities, and judgment.

Standard Error of Estimate

It measures the accuracy with which a sample represents a population, specifically the standard deviation of the observed values from the values predicted by a regression model.

Significance Level

The likelihood of incorrectly dismissing the null hypothesis during a statistical test when it is in fact correct; an assessment of the chance of committing a Type I error.

Negatively Linearly Related

A relationship between two variables where an increase in one variable results in a decrease in the other, represented by a downward sloping line on a graph.