Use the Following to Answer Questions

question 20

Multiple Choice

Use the following to answer questions :
Figure: City with Two Polluters
-Suppose that the production of roses generates a positive externality in that travellers enjoy the scenic beauty of the garden.An appropriate government policy yielding the efficient outcome would be a:

• A) Pigouvian tax.
• B) Pigouvian subsidy.
• C) system of rose-production permits.
• D) reduction in transaction costs.

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Definitions:

Aerobic Respiration

The process of producing cellular energy involving oxygen, converting glucose and oxygen into carbon dioxide and water, and releasing energy.

Nutrients

Substances needed by organisms to survive, grow, and reproduce, which are obtained from food.

Inflation Reflex

A reflex that helps regulate the depth of breathing, initiated by stretch receptors in the lungs to prevent overexpansion.

Inspirations

The act of drawing air into the lungs; also known as inhalation.