Question
Pigouvian subsidies __________________________________________.
Resolve the economic problem created by a positive externality.
Result in the decrease in the production and consumption of a private good to the socially optimal level.
Decrease the socially optimal level of production.
Resolve the economic problem created by a negative externality.
Resolve the economic problem created by a positive externality.
Result in the decrease in the production and consumption of a private good to the socially optimal level.
Decrease the socially optimal level of production.
Resolve the economic problem created by a negative externality.
Answers
GPT-4o mini
Pigouvian subsidies resolve the economic problem created by a positive externality.
These subsidies are intended to encourage the production or consumption of goods that generate positive externalities, thus aligning private incentives with social benefits and promoting a socially optimal level of production and consumption.
These subsidies are intended to encourage the production or consumption of goods that generate positive externalities, thus aligning private incentives with social benefits and promoting a socially optimal level of production and consumption.