Which of the Following Statements Is False

question 76

Multiple Choice

Which of the following statements is false?

• A) In the case of a negative externality,the market equilibrium is inefficient.
• B) In the case of a negative externality,when a tax is set equal to the marginal external costs (MEC)efficiency can be achieved.
• C) In the case of a negative externality,when a tax is set that is greater than the marginal external costs (MEC)inefficiency will result.
• D) In the case of a positive externality,when a tax is set equal to the marginal external benefits (MEB)efficiency can be achieved.

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