Governments Can Most Effectively Encourage a Firm to Produce the Efficient

question 206

Multiple Choice

Governments can most effectively encourage a firm to produce the efficient level of output of a good whose production causes a beneficial externality by

• A)increasing the demand at every price for the good.
• B)subsidizing the production of the good.
• C)taxing the production of the good.
• D)imposing a price ceiling on the good.

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Definitions:

Positive Psychology

An area of psychology focused on what can make our lives better and what might make us happier.

Competence And Autonomy

The ability of an individual to effectively perform tasks and make choices without external influence.

Extrinsic Motivation

Motivation driven by external rewards such as money, fame, grades, and praise.

Autonomy

The capacity to make an informed, uncoerced decision independently, often emphasized as an important aspect of personal development and psychological health.