That Some Firms Are Engaged in More Than One Type

question 275

Multiple Choice

That some firms are engaged in more than one type of business is explained, in some cases, by

• A)moral injunctions such as the Golden Rule.
• B)the existence of charitable organizations.
• C)government regulations that discourage the internalization of externalities.
• D)the fact that the internalization of externalities sometimes coincides with the self-interest of the relevant parties.

---

Definitions:

Emissions Tax

A tax imposed on the emission of pollutants, aimed at reducing environmental harm.

Optimal Tax

A tax system designed to achieve the best balance between efficiency and equity.

Marginal Social Benefit

The supplementary gain for society derived from the consumption of one extra unit of a good or service.

Marginal Social Cost

The cost to society of producing an additional unit of a good or service, including both private costs and any externalities.