Why Is the Market for Honey Efficient Despite the Potential

question 55

Multiple Choice

Why is the market for honey efficient despite the potential problem of pollination externalities?

• A) The government offers a Pigouvian subsidy for the production of honey.
• B) The government imposes a Pigouvian tax on the production of honey.
• C) The quantity of honey that can be produced each year is capped.
• D) Beekeepers are paid for the pollination services their bees provide, thus internalizing the externality.

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