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If the production of a good involves an external social cost, resource allocation could be improved by:
Suggested Answer: B
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13 comments · newest first
TH
Thaddeus
12 months ago
Price controls? That's just gonna create shortages!
SI
Sina
12 months ago
Subsidies for producers just encourage more production, right?
PA
Patria
1 year ago
Wait, can a tax really fix this? Seems too simple.
AL
Alyce
1 year ago
Totally agree, taxes can help reduce consumption!
BU
Bulah
1 year ago
Imposing an indirect tax is a classic solution for external costs.
VI
Vicky
1 year ago
I’m confused about the price controls option. I don’t recall it being a good way to address external costs, but I could be wrong.
LE
Leslie
1 year ago
I feel like we practiced a question similar to this, and the answer was about correcting market failures. I think it was about taxes, so I’m leaning towards B too.
MA
Marguerita
1 year ago
I’m not entirely sure, but I remember something about subsidies potentially leading to overproduction. So maybe option B is better?
CA
Catalina
1 year ago
I think imposing an indirect tax on the good might be the right answer since it can help internalize the external costs.
CO
Cordelia
1 year ago
This seems like a straightforward question about loyalty promotions. I think the Cumulative Promotion is the best option here, since the company wants to encourage sustained engagement over time.
MA
Margurite
1 year ago
Hmm, I'm a bit unsure about the difference between catalogs, categories, and category sets. I'll need to think this through carefully.
YV
Yvonne
1 year ago
I'm pretty confident I know the answer to this one. The NIST and SANS frameworks are commonly used for security incident response, so I'll check those options.
DO
Dong
1 year ago
Okay, I've got this. Based on the detailed description, the answer has to be B - an explosion. That's the only choice that matches all the key details provided.