When Producing a Good Creates Pollution, an External Cost, and the Government

question 93

Multiple Choice

When producing a good creates pollution, an external cost, and the government imposes a tax equal to the marginal external cost, then

• A) the amount of output moves farther away from the efficient amount.
• B) transaction costs will be high.
• C) the efficient amount of the good will be produced.
• D) property rights must have already been established.

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Definitions:

Ideological Reasoning

Thinking that is heavily influenced by a set system of beliefs or ideals.

Legal Principle

Fundamental guideline or established norm accepted within a legal system as a basis for decision-making.

Ideological Reasoning

The process of forming judgments and decision-making based on a set of beliefs or ideologies.

Prosecuting Attorney

A legal representative who brings charges against a suspect in a court of law and tries to prove the case against them.