If the Production of a Particular Good Involves Significant External

question 162

Multiple Choice

If the production of a particular good involves significant external costs, to force the externality to be internalized the government might:

• A)​impose a tax on production of the good in order to increase production.
• B)​impose a tax on production of the good in order to decrease production.
• C)​offer a subsidy for production of the good in order to increase production.
• D)​offer a subsidy for production of the good in order to decrease production.