One Way to Make Consumers Take a Negative Externality into Account

question 123

Multiple Choice

One way to make consumers take a negative externality into account in their demand decision is to:

• A) place a tax on the item.
• B) subsidize the purchase of the item.
• C) give suppliers a production credit.
• D) None of these statements is true.

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Definitions:

Accurate

The degree to which a measurement, calculation, or specification conforms to the correct value or a standard.

Cent

A unit of currency equal to one hundredth of various countries’ basic units, often symbolized by a small coin.

Accurate

The quality of being close to the true or correct value, without significant error or distortion.

Cent

A unit of currency equaling one-hundredth of various currencies, including the US dollar and the Euro.