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berry berry
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9 months ago

Economist A believes that the case for government is a strong one, but she doesn't always say, when it comes to negative externalities, that government can turn an inefficient market outcome into an efficient outcome.  Which statement is economist A most likely to make?



▸

If the tax placed on the activity that generates the negative externality is too large, we are not likely too move from inefficiency to efficiency.



▸

If the subsidy placed on the activity that generates the negative externality is too small, we are not likely to move from inefficiency to efficiency.



▸

If there is a free rider problem, then government cannot solve the problem of negative externalities.



▸

a and b



▸

none of the above

Textbook 
Economics

Economics


Edition: 12th
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mooltipasmooltipas
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9 months ago
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berry Author
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9 months ago
Helped a lot
kriggs62
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Yesterday
Brilliant ツ
Kstan109
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2 hours ago
Smart ... Thanks!
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