The Strongest Case for Government with Respect to a Negative

question 4

Multiple Choice

The strongest case for government with respect to a negative externality is that government needs to set the

• A) subsidy equal to the marginal private benefits.
• B) tax equal to the marginal external costs plus $1.
• C) tax slightly below the marginal external costs.
• D) tax equal to the marginal external costs.
• E) subsidy equal to the marginal social benefits.

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Definitions:

Limited Resources

The finite availability of resources such as time, money, and materials, which requires careful management.

Personality Clash

Antagonistic relationship between two people based on differences in personal attributes, preferences, interests, values, and styles.

Organizational Citizenship Behavior

Voluntary actions by employees that are not part of their formal job responsibilities but contribute to the overall effectiveness of the organization.

Work Interfering

Situations where external factors or personal issues prevent effective job performance or fulfillment of professional responsibilities.