Multiple Choice
If the production of a particular good involves significant external costs, to force the externality to be internalized the government might:
A) impose a tax on production of the good in order to increase production.
B) impose a tax on production of the good in order to decrease production.
C) offer a subsidy for production of the good in order to increase production.
D) offer a subsidy for production of the good in order to decrease production.
Correct Answer:
Verified
Correct Answer:
Verified
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