If the Production of a Particular Good Involves Significant External

question 162

Multiple Choice

If the production of a particular good involves significant external costs, to force the externality to be internalized the government might:

• A)​impose a tax on production of the good in order to increase production.
• B)​impose a tax on production of the good in order to decrease production.
• C)​offer a subsidy for production of the good in order to increase production.
• D)​offer a subsidy for production of the good in order to decrease production.

---

Definitions:

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting attention and responding actions.

Adrenaline

A hormone and neurotransmitter also known as epinephrine, released in response to stress or excitement, causing increased heart rate and energy.

SSRI

A type of antidepressant called selective serotonin reuptake inhibitor, used to treat depression by increasing serotonin levels in the brain.

Serotonin

A neurotransmitter that plays a key role in mood regulation, digestion, sleep, and other bodily functions.