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 275 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?

Complications of influenza include: bacterial pneumonia, ear and sinus infections, dehydration, and worsening of chronic conditions such as asthma, congestive heart failure, or diabetes.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

Human neurons are so small that they require a microscope in order to be seen. However, some neurons can be up to 3 feet long, such as those that extend from the spinal cord to the toes.

Did you know?

According to animal studies, the typical American diet is damaging to the liver and may result in allergies, low energy, digestive problems, and a lack of ability to detoxify harmful substances.

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.

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
Levels of Processing Affects Long-Term but not Short-Term Memory Levels of Processing Affects Long-Term but not Short-Term Memory
Herbert Spencer (1820–1903), sometimes called the second founder of sociology, coined the term ... Herbert Spencer (1820–1903), sometimes called the second founder of sociology, coined the term ...
Example of Index entry with Main Term and indented subterms. Example of Index entry with Main Term and indented subterms.
Part of a Semantic Network in Long-Term Memory Part of a Semantic Network in Long-Term Memory
Post-term birth rates, by province/territory, Canada Post-term birth rates, by province/territory, Canada
Video: Subunits of DNA And Semi Conservative Replication

For a complete list of videos, visit our video library