To Internalize a Negative Externality, _____

question 34

Multiple Choice

To internalize a negative externality, _____.

• A)a producer's costs should be reduced by an amount equal to the external cost resulting from the production of a good
• B)a producer's costs should be increased by an amount equal to the external cost resulting from the production of a good
• C)a producer should receive a subsidy equal to the external cost resulting from the production of a good
• D)the government should take over the production of a good
• E)the government should sell a good only to those who are willing to bear the burden of the externality in the form of high prices

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Definitions:

Test Statistic

A value calculated from sample data during a hypothesis test, used to make a decision about the null hypothesis.

P-Value

A statistical measure that helps to determine the strength of the results to support or reject the null hypothesis.

Null Hypothesis

A hypothesis that assumes there is no statistical significance in a set of given observations and that any observed difference is due to sampling or experimental error.

P-Value

The probability of obtaining test results at least as extreme as the results actually observed, under the assumption that the null hypothesis is true.