Asked by Nitika Upadhyaya on Jul 21, 2024
Verified
Governments often ________ activities that generate external ________.
A) tax; costs
B) subsidize; costs
C) tax; benefits
D) simultaneously tax and subsidize; costs
External Costs
Costs that are not borne by the parties involved in an economic transaction but are instead imposed on others or society.
Government Activities
Actions and operations conducted by the government including lawmaking, regulation, and public services.
- Analyze the effects of externalities and government intervention on social welfare.
Verified Answer
SK
Shreyal KamatJul 28, 2024
Final Answer :
A
Explanation :
Governments often tax activities that generate external costs to discourage those activities and to help cover the societal costs they impose.
Learning Objectives
- Analyze the effects of externalities and government intervention on social welfare.