If External Benefits Occur When a Good Is Consumed,then the Government

question 2

Multiple Choice

If external benefits occur when a good is consumed,then the government should:

• A) Tax the producers of the good.
• B) Make transfer payments to those who incur the externalities.
• C) Subsidize the consumption or production of the good.
• D) Enforce antitrust laws against producers of the good.

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Definitions:

Anterograde Amnesia

A condition where a person is unable to form new memories after the event that caused the amnesia, although long-term memories from before the event remain intact.

New Memories

The formation and storing of information and experiences that can be recalled at a later time, a fundamental process in learning.

Inability

The state of being unable to perform a function or action due to physical or mental limitations.

Recall

The mental process of retrieving information from the past.