A Pigouvian Subsidy Is

question 180

Multiple Choice

A Pigouvian subsidy is:

• A)designed to discourage activities generating externalities.
• B)designed to encourage activities generating external benefits.
• C)appropriate when the marginal social cost curve is above the marginal cost of production curve.
• D)appropriate when the marginal social cost curve and the marginal social benefit curve intersect at an inefficient level.

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Definitions:

Brain

The organ located in the head of an organism that controls most of the activities of the body, processes sensory information, and is the center of thought and emotion.

Endorphins

Neurochemicals produced in the brain that act as natural painkillers and also boost feelings of pleasure or well-being.

Pain-Controlling Chemicals

Biological substances produced by the body, such as endorphins, that help to naturally relieve pain.

Neurons

Special cells found in the nervous system that are designed to transfer information to other nerve cells, muscles, or glandular cells.