If There Is a Negative Externality Involved in Producing Good

question 14

Multiple Choice

If there is a negative externality involved in producing good X, then

• A)the production possibility curve will be too steeply sloped toward good X.
• B)a subsidy to the producer of good X can correct the inefficiency involved.
• C)engaging in international trade will solve the inefficiency.
• D)None of these is true.

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