Positive Externalities Can Be Dealt with by _____ Them

question 23

Multiple Choice

Positive externalities can be dealt with by _____ them.

• A)subsidizing
• B)taxing
• C)regulating
• D)encouraging

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Definitions:

Negative Returns

A situation in which an increase in the amount of inputs used leads to a decrease in the level of output, often seen in cases of over-investment or inefficient production processes.

Worker

An individual who performs tasks or services for compensation; an employee.

Variable Cost

Costs that change in proportion to the activity or volume of output in production, such as raw materials and direct labor costs.

Fixed Cost

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance.