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 209 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?

It is believed that humans initially contracted crabs from gorillas about 3 million years ago from either sleeping in gorilla nests or eating the apes.

Did you know?

An identified risk factor for osteoporosis is the intake of excessive amounts of vitamin A. Dietary intake of approximately double the recommended daily amount of vitamin A, by women, has been shown to reduce bone mineral density and increase the chances for hip fractures compared with women who consumed the recommended daily amount (or less) of vitamin A.

Did you know?

Congestive heart failure is a serious disorder that carries a reduced life expectancy. Heart failure is usually a chronic illness, and it may worsen with infection or other physical stressors.

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

Cyanide works by making the human body unable to use oxygen.

A full-term pregnancy. Image illustrates position of the fetus and the structures associated with pr A full-term pregnancy. Image illustrates position of the fetus and the structures associated with pr
Bipolar disease. The term bipolar means “pertaining to two poles.” The individual with this form of Bipolar disease. The term bipolar means “pertaining to two poles.” The individual with this form of
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
Relations Between Iconic Memory, Short-Term Memory, and Long-Term Memory Relations Between Iconic Memory, Short-Term Memory, and Long-Term Memory
Three Pieces of the Long-Term Weight-Loss Puzzle Diet Three Pieces of the Long-Term Weight-Loss Puzzle Diet
Video: Hormonal regulation of blood pressure - RAA system

For a complete list of videos, visit our video library