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Question
The government identifies a situation where production of a good is generating a negative externality. A reasonable option for the government to consider is to
a. impose a tax on the sale of this good.
b. pass a law preventing the production of this good.
c. subsidize the cost of producing the good.
d. pass a law preventing the consumption of this good.
e. ration the good.
Answer
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Related questions
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The economic entity most likely to engage in price gouging is
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What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
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Q:
Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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Q:
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Q:
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