A Tax May Be Used as a Corrective Device in the Case

question 164

Multiple Choice

A tax may be used as a corrective device in the case of a negative externality because it will __________ marginal private costs and __________ supply.

• A)increase; decrease
• B)increase; increase
• C)decrease; decrease
• D)decrease; increase

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Definitions:

Subcutaneous Fat

A layer of fat stored directly under the skin, serving as insulation and an energy reserve for the body.

Visual Acuity

The degree of detail the eye can discern in an image.

Lanugo

The fine, woolly hair or down on the shoulders, back, sacrum, and earlobes of the unborn child, which may remain for a few weeks after birth.

Prematurely

Occurring or done before the usual or proper time; too early.