Questions
Single choice
Which of the following is a policy approach to negative externalities?
Options
A.Paying subsidies to producers of the related good
B.Levying taxes or charges on the related good
C.Eliminating taxes or charges on the related good
D.Having the government produce a version of the related good
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Step-by-Step Analysis
The question asks you to identify a policy approach to negative externalities.
Option 1: 'Paying subsidies to producers of the related good' is aimed at supporting production, which tends to encourage more of the good and can exacerbate negative externalities rather than mitigat......Login to view full explanationLog in for full answers
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