To Correct a Positive Externality Problem, the Government Can Impose

question 162

Multiple Choice

To correct a positive externality problem, the government can impose

• A)a subsidy to decrease the marginal private benefits.
• B)a subsidy to increase the marginal private benefits.
• C)a tax to increase the marginal social benefits.
• D)a tax to decrease the marginal social benefits.
• E)either a tax or a subsidy to change the marginal social benefits.

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