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 295 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?

On average, the stomach produces 2 L of hydrochloric acid per day.

Did you know?

Hippocrates noted that blood separates into four differently colored liquids when removed from the body and examined: a pure red liquid mixed with white liquid material with a yellow-colored froth at the top and a black substance that settles underneath; he named these the four humors (for blood, phlegm, yellow bile, and black bile).

Did you know?

Sperm cells are so tiny that 400 to 500 million (400,000,000–500,000,000) of them fit onto 1 tsp.

Did you know?

In most climates, 8 to 10 glasses of water per day is recommended for adults. The best indicator for adequate fluid intake is frequent, clear urination.

Did you know?

The most dangerous mercury compound, dimethyl mercury, is so toxic that even a few microliters spilled on the skin can cause death. Mercury has been shown to accumulate in higher amounts in the following types of fish than other types: swordfish, shark, mackerel, tilefish, crab, and tuna.

The Role of Summation in Long-Term Potentiation The Role of Summation in Long-Term Potentiation
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
Levels of Processing Affects Long-Term but not Short-Term Memory Levels of Processing Affects Long-Term but not Short-Term Memory
Identify the Main Term Identify the Main Term
How to evaluate the imaginary term i at any exponent i^n How to evaluate the imaginary term i at any exponent i^n
Full-term pregnancy Full-term pregnancy
Video: Amniocentesis and CVS Animation

For a complete list of videos, visit our video library