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mlee52381 mlee52381
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A year ago
Taxes and Subsidies

The graph shows the marginal cost (MC), the marginal benefit (MB), and the marginal social benefit (MSB) of getting a flu shot.
 
Assume that P1=$1.40, P2=$3.85, P3=$5.85, P4=$8.30, Q1=455 and Q2=740. This illustrates a ________ (negative/positive) externality. The government can achieve economic efficiency by imposing a ________ (subsidy/tax) equal to ________.

▸ negative, subsidy, $6.90

▸ positive, tax, $6.90

▸ negative, tax, $4.45

▸ positive, subsidy, $4.45
Textbook 
Macroeconomics

Macroeconomics


Edition: 3rd
Authors:
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elacevedoelacevedo
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A year ago
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mlee52381 Author
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A year ago
Thanks for your help!!
GeorgeNeist
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Yesterday
Good timing, thanks!
annielin111
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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