Multiple Choice
If the production of a product or service involves external benefits, then the government can improve efficiency in the market by
A) providing a subsidy to correct for an overallocation of resources.
B) providing a subsidy to correct for an underallocation of resources.
C) imposing a corrective tax to correct for an overallocation of resources.
D) imposing a corrective tax to correct for an underallocation of resources.
Correct Answer:
Verified
Correct Answer:
Verified
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