26 What is a common economic approach to address positive...

26 What is a common economic approach to address positive externalities? A Increasing competition among firms to minimize the positive externalities they create. B Imposing taxes on the beneficiaries of the external benefits. C Providing subsidies or government funding to encourage the activity producing the positive externality. D Enforcing legal regulations to limit the production of positive externalities.

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00:02 All right, let's take a look at our questions here.

00:04 So for 14, suppose that the flu shot creates a positive external equal to shot.

00:11 Furthermore, suppose that the government offers a six -shot subsidy to producers.

00:19 What is the relationship between the equilibrium quantity and the social optimal quantity of the flu shots produced? so looking at our options here, c would appear to be the best choice, that the equilibrium quantity is less than the socially optimal quantity.

00:37 Looking at 15, education yields positive externalities, for example, a more educated population.

00:43 So looking at our choices for this, may increase the pace of technological advances, leading to higher productivity and wages, leads to more informed voters, resulting in better government for everyone, tends to result in lower crime rates.

00:59 So all of these are correct.

01:01 So we're going to go with d on this one, all of the above.

01:07 Number 16, in the absence of externalities, the invisible hand leads the market to maximize.

01:12 And we have a, output of goods or services in that market.

01:15 B, both equality and efficiency in that market.

01:18 C, total benefit to society from the market.

01:21 D, producer profit from the market.

01:24 So out of all these choices, it would appear that a would be the strongest choice...

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