If Some Activity Creates External Benefits as Well as Private

question 117

Multiple Choice

If some activity creates external benefits as well as private benefits, then economic theory suggests that the activity ought to be

• A)taxed.
• B)prohibited.
• C)subsidized.
• D)left alone.

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Definitions:

Desired Behavior

The specific actions or reactions that an individual, group, or organization aims to elicit from others.

Reinforcer

A stimulus or event that increases the likelihood of the recurrence of the behavior it follows.

Deliberately

Done consciously and intentionally; often implying careful thought or planning.

Reinforcement

In psychology, the process of encouraging or establishing a pattern of behavior by providing rewards or consequences.