How do subsidies help in achieving social efficiency in markets with positive externalities?

How can a government effectively internalize a negative externality in the market for fossil fuels?

What is the purpose of pollution permits in managing externalities?

Why might a government choose to allow a certain level of pollution in an industrial area?

Why might it be economically rational to allow a certain level of pollution?

What is a potential drawback of using pollution permits as a solution to externalities?

What is a potential advantage of using subsidies to address positive externalities?

What happens to the supply curve when a corrective tax is imposed on a good with negative externalities?

Which of the following scenarios best illustrates the use of a Pigovian tax?

What is a Pigovian tax?