Question 1
Governments often ________ activities that generate external ________.
◦ tax; benefits
◦ subsidize; benefits
◦ subsidize; costs
◦ simultaneously tax and subsidize; costs
Question 2
My neighbor ________ is an example of an external benefit.
◦ smoking a cigarette in my presence
◦ playing loud music on his radio that I can hear
◦ dumping hazardous chemicals on a stream that passes through my property
◦ keeping the leaves from his trees away from my yard