This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What is meant by the term internalizing an externality? How does a Pigovian tax or subsidy ... (Read 277 times)

Bob-Dole

  • Hero Member
  • *****
  • Posts: 547
on: Jun 29, 2018
What is meant by the term internalizing an externality? How does a Pigovian tax or subsidy internalize an externality?
 
  What will be an ideal response?

Question 2

An increase in the quantity of a product supplied is caused by an increase in the price of the product.
 
  Indicate whether the statement is true or false


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

lauravaras

  • Sr. Member
  • ****
  • Posts: 347
Reply #1 on: Jun 29, 2018
Answer to Question 1

Internalizing an externality refers to transferring the external benefit or cost to the producer or consumer that generates the externality. A Pigovian tax transfers a negative externality in production back to the producer, which reduces the supply of the product and results in an efficient level of output. A Pigovian subsidy transfers a positive externality in consumption back to the consumer, which increases the demand for the product and results in an efficient level of output.

Answer to Question 2

TRUE


Bob-Dole

  • Hero Member
  • *****
  • Posts: 547
Reply #2 on: Jun 29, 2018
Correct answers!


lauravaras

  • Sr. Member
  • ****
  • Posts: 347
Reply #3 on: Jun 29, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

More than 150,000 Americans killed by cardiovascular disease are younger than the age of 65 years.

Did you know?

Malaria mortality rates are falling. Increased malaria prevention and control measures have greatly improved these rates. Since 2000, malaria mortality rates have fallen globally by 60% among all age groups, and by 65% among children under age 5.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

The heart is located in the center of the chest, with part of it tipped slightly so that it taps against the left side of the chest.

Did you know?

It is believed that the Incas used anesthesia. Evidence supports the theory that shamans chewed cocoa leaves and drilled holes into the heads of patients (letting evil spirits escape), spitting into the wounds they made. The mixture of cocaine, saliva, and resin numbed the site enough to allow hours of drilling.

Testing the effects of long-term fertilizing on inter-actions between mycorrhizal fungi and plants o Testing the effects of long-term fertilizing on inter-actions between mycorrhizal fungi and plants o
Long-Term Potentiation and Long-Term Depression Long-Term Potentiation and Long-Term Depression
The Role of the Hippocampus and Cerebral Cortex in Long-Term Memory Storage The Role of the Hippocampus and Cerebral Cortex in Long-Term Memory Storage
Long Term Control Medications Long Term Control Medications
Three Pieces of the Long-Term Weight-Loss Puzzle Diet Three Pieces of the Long-Term Weight-Loss Puzzle Diet
These findings are from Colby and Kohlberg's long-term longitudinal study These findings are from Colby and Kohlberg's long-term longitudinal study
Video: Peptide Bond Formation Animation

For a complete list of videos, visit our video library