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:

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