ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If the production of a product or service involves external benefits, then the government can improve efficiency in the market by
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providing a subsidy to correct for an overallocation of resources.
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providing a subsidy to correct for an underallocation of resources.
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imposing a corrective tax to correct for an overallocation of resources.
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imposing a corrective tax to correct for an underallocation of resources.
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Explanation:
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