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.
Correct Answer:
Verified
Correct Answer:
Verified
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