If the Production of a Good Creates Large Spillover Benefits

Multiple Choice

If the production of a good creates large spillover benefits on others, the government might correct for the:

A) ​overallocation of resources to its production by subsidizing it.
B) ​overallocation of resources to its production by imposing a tax on it.
C) ​underallocation of resources to its production by subsidizing it.
D) ​underallocation of resources to its production by imposing a tax on it.