If Some Activity Creates Positive Externalities as Well as Private

question 112

Multiple Choice

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

• A) taxed.
• B) prohibited.
• C) subsidized.
• D) left alone under the idea of laissez faire.

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Definitions:

Solution

The answer to a problem or the value of a variable that satisfies an equation.

Equivalent

Having the same value, function, or meaning, often in reference to algebraic expressions or equations that are different in form but equal in value.

Equations

Mathematical statements that assert the equality of two expressions.

Equation

A statement in mathematics that claims two expressions are equal.