Asked by Chasity Martin on Jul 07, 2024
Verified
Taxes on a producing firm's ________ are meant to force decision makers to consider the full costs of their actions.
A) positive externalities
B) marginal production
C) spillovers
D) total production
Positive Externalities
Benefits that are enjoyed by a third-party or society as a result of an economic transaction.
Producing Firm
An entity or company involved in the creation of goods or services to be offered to consumers.
Decision Makers
Individuals or groups responsible for making choices that determine the course of actions to be followed.
- Identify the role of taxes, subsidies, and government intervention in addressing external costs and benefits associated with production.
Verified Answer
OL
Osvaldo Lopez EsquivelJul 11, 2024
Final Answer :
C
Explanation :
Taxes on a producing firm's spillovers (or negative externalities) are meant to internalize the external costs imposed on society that are not accounted for in the market price of a good or service. This encourages firms to consider the full social costs of their production decisions.
Learning Objectives
- Identify the role of taxes, subsidies, and government intervention in addressing external costs and benefits associated with production.
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