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 184 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?

Aspirin may benefit 11 different cancers, including those of the colon, pancreas, lungs, prostate, breasts, and leukemia.

Did you know?

There are approximately 3 million unintended pregnancies in the United States each year.

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

Did you know?

Fungal nail infections account for up to 30% of all skin infections. They affect 5% of the general population—mostly people over the age of 70.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Long-term studies of the Glanville fritillary butterfly, Melitaea cinxia, have provided exceptional Long-term studies of the Glanville fritillary butterfly, Melitaea cinxia, have provided exceptional
Relations Between Iconic Memory, Short-Term Memory, and Long-Term Memory Relations Between Iconic Memory, Short-Term Memory, and Long-Term Memory
Long Term Control Medications Long Term Control Medications
The relationship between the permissible exposure limit (PEL), the short-term exposure limit (STEL), ... The relationship between the permissible exposure limit (PEL), the short-term exposure limit (STEL), ...
Human activity has released carbon from sequestration in long-term reservoirs Human activity has released carbon from sequestration in long-term reservoirs
Part of a Semantic Network in Long-Term Memory Part of a Semantic Network in Long-Term Memory
Video: Mechanisms of capillary exchange

For a complete list of videos, visit our video library