In the Case of a Negative Externality,in Order to Achieve

question 55

Multiple Choice

In the case of a negative externality,in order to achieve efficiency the government must set the _________________ equal to the marginal ____________________.

• A) tax; external costs
• B) tax; external benefits
• C) subsidy; external costs
• D) subsidy; external benefits
• E) tax; private costs

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Definitions:

Small Business Success

The achievement of desired visions and planned goals, leading to a sustainable competitive advantage for a small business, often measured by financial performance, market share, or innovation.

Creative Destruction

An economic theory that suggests the dismantling of long-standing practices in order to make way for innovation and new systems that enhance economic vitality.

Joseph Schumpeter

An economist and political scientist who proposed the theory of creative destruction in economics.

New Businesses

New businesses are entities in their early stages of operation, often characterized by innovation, development of products or services, and efforts to secure market position.