Question

Three ways governments can encourage production of goods with external benefits are______

A) private subsidies, marketable permits, and intellectual property rights.
B) private subsidies, marketable permits, and vouchers.
C) intellectual property rights, marketable permits, and vouchers.
D) taxes, emission charges, and marketable permits.
E) private subsidies, vouchers, and intellectual property rights.

Answer 1

To encourage the production of goods with external benefits, governments can utilize private subsidies, intellectual property rights, and vouchers. These measures help offset costs, protect innovations, and direct consumer spending towards beneficial goods.

Step-by-step explanation:

Ways Governments Can Encourage Production of Goods with External Benefits

The question addresses how governments can stimulate the production of goods that have positive externalities or external benefits. Three ways that governments can encourage such production include:

Private subsidies which provide financial assistance to firms to offset the costs of producing goods with external benefits.

Intellectual property rights, like patents, which protect inventors by giving them exclusive rights to benefit from their creations for a period. This encourages innovation and investment in research and development (R&D).

Vouchers, which can be used to direct spending to certain goods with external benefits by giving them to consumers.

From the provided options, the correct answer that encompasses these incentives is option E) private subsidies, vouchers, and intellectual property rights.