If There Are External Benefits or Positive Externalities Associated with Consumption

Multiple Choice

If there are external benefits or positive externalities associated with consumption and production of a product, it can be said that the:

A) government should consider placing a special tax on producers.
B) government should consider prohibiting the production of the commodity.
C) supply curve for the product lies too far to the right to provide an efficient allocation of resources.
D) demand curve understates the total benefit from the product and resources are under-allocated to its production.