olicymakers are provided data about the private and social benefits of a good being sold in the market. Quantity Private MB ($) Social MB ($) 4 6 9. 5 4 7 6 2 5 7 3 /hat is the size of the externality? If the externality is positive, enter a positive number. If negative, make it a negative number. Enter numeric value iven this data, policymakers must decide whether to address the associated externality with a subsidy or a tax. As their conomic consultant, which of the two policy tools would you recommend? a subsidy a tax

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
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Policymakers are provided data about the private and social benefits of a good being sold in the market.
Quantity Private MB ($) Social MB ($)
4
9.
5
4
7
6.
2
5
7
3
What is the size of the externality? If the externality is positive, enter a positive number. If negative, make it a negative number.
Enter numeric value
Given this data, policymakers must decide whether to address the associated externality with a subsidy or a tax. As their
economic consultant, which of the two policy tools would you recommend?
a subsidy
a tax
Transcribed Image Text:Policymakers are provided data about the private and social benefits of a good being sold in the market. Quantity Private MB ($) Social MB ($) 4 9. 5 4 7 6. 2 5 7 3 What is the size of the externality? If the externality is positive, enter a positive number. If negative, make it a negative number. Enter numeric value Given this data, policymakers must decide whether to address the associated externality with a subsidy or a tax. As their economic consultant, which of the two policy tools would you recommend? a subsidy a tax
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