The government engages in a technology policy ?
Correct answer: B. to internalize the positive externality associated with technology-enhancing industries.
- A. by allocating tradable technology permits to high technology industry.
- B. to internalize the positive externality associated with technology-enhancing industries.
- C. to help stimulate private solution to the technology externality
- D. to internalize the negative externality associated with industrial pollution
Explanation
Technology-enhancing industries can create benefits for other firms and consumers that they do not receive payment for, a positive externality. Government technology policy therefore aims to internalize this spillover so private decisions reflect social benefits.
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