When the Government Uses a Subsidy in the Case of a Positive

question 51

Multiple Choice

When the government uses a subsidy in the case of a positive externality, it sets the subsidy equal to the

• A)product of the marginal social benefit and the private benefit of the good providing the externality.
• B)difference between the marginal private benefit and the marginal social benefit of the good providing the externality.
• C)sum of the marginal social benefit and the private benefit of the good providing the externality.
• D)difference between the marginal social benefit and the marginal private benefit of the good providing the externality.
• E)difference between the marginal social benefit and the marginal social cost of the good providing the externality.

---

Definitions:

Contingency Planning

The development of strategies to prepare for and respond to unexpected events or situations that could negatively impact the organization.

Political Unrest

A state of disagreement or conflict within a country involving its government, often leading to protests, strikes, or even violence.

Qualitative Forecasting

A forecasting method that relies on expert judgments and non-quantifiable information to predict future outcomes.

Special Expertise

Unique skills or knowledge in a particular field, making an individual or organization capable of performing tasks that require specialized understanding.