If a tin of sardines creates a noxious odor for non-sardine-eaters equivalent to $1 per tin, the government could correct the odorous externality and achieve an efficient outcome by    A) taxing sardine tins at a rate of $1per tin   B) subsidizing sardines tins at a rate of$1 per tin.     C) capping total sardine consumption at 1000 tins per day.    D) banning sardines.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter16: Government Regulation
Section: Chapter Questions
Problem 7E
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If a tin of sardines creates a noxious odor for non-sardine-eaters equivalent to

$1

per tin, the government could correct the odorous externality and achieve an efficient outcome by

 

 A) taxing sardine tins at a rate of $1per tin

 

B) subsidizing sardines tins at a rate of$1 per tin. 

 

 C) capping total sardine consumption at 1000 tins per day. 

 

D) banning sardines.

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