To correct for negative externalities, the government A) ...

[penguins]

To correct for negative externalities, the government
 
  A) should allow the price system do the correction.
  B) can impose a tax.
  C) can provide a subsidy to consumers.
  D) should create a public good.

Question 2

Underlying economic theory is the idea that
 
  A) people respond only to negative incentives, not to positive ones.
  B) choices are affected by both positive and negative incentives.
  C) value judgments do not play a role in the economic decisions people make.
  D) money is the only incentive that matters.

[covalentbond]

Answer to Question 1

B

Answer to Question 2

B