If an activity generates a positive externality,the government can make provision of that activity more efficient by _____,and if an activity generates a negative externality,the government can make provision of that activity more efficient by _____.
A)taxing it;banning it
B)subsidizing it;banning it
C)subsidizing it;taxing it
D)publicizing it;taxing it

Question

Quizplus · Accepted Answer

Subsidies are used to increase provision of activities with positive externalities and taxes are used to decrease provision of activities that generate negative externalities.

If an Activity Generates a Positive Externality,the Government Can Make