Which of the following statements is not correct?
A)Government policies may improve the market's allocation of resources when negative externalities are present by taxing these goods.
B)A positive externality is an example of a market failure.
C)Markets allocate scarce resources with the forces of supply and demand.
D)Externalities cannot be positive.

Question

Quizplus · Accepted Answer

Externalities can be both positive and negative. A positive externality occurs when a transaction results in benefits to others not involved in the transaction. For example, a vaccinated individual provides benefits to others by reducing the spread of disease.

Which of the Following Statements Is Not Correct