For Which of the Following Goods Would the Imposition of a Tax

question 73

Multiple Choice

For which of the following goods would the imposition of a tax most likely improve the efficiency of the market outcome?

• A) the production of a good with external benefits
• B) the production of a rival good with no external costs
• C) the production of a good with external costs
• D) the production of a public good

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Definitions:

Smog

A type of air pollution characterized by a mixture of smoke and fog, often resulting from industrial emissions and vehicle exhaust.

Stratospheric Ozone

A layer of ozone molecules located in the Earth's stratosphere that absorbs and protects living organisms from the harmful effects of the sun's ultraviolet radiation.

Ultraviolet Radiation

Electromagnetic radiation with a wavelength shorter than that of visible light, but longer than X-rays, which can have effects on the skin such as sunburns and vitamin D synthesis.

Gamma Radiation

Electromagnetic radiation of high frequency and thus high energy, often emitted by radioactive materials.