When the Production of a Good Creates an External Cost

question 103

Multiple Choice

When the production of a good creates an external cost, by setting the tax rate equal to the _______ , firms can be made to behave in the same way as they would if they bore the cost of the externality directly.

• A) marginal private benefit
• B) marginal external cost
• C) marginal social cost
• D) marginal social benefit

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Definitions:

Consumer Privacy

The rights and measures to protect an individual's personal information from being disclosed without consent.

Ethical Guidelines

Standards of behavior and practices considered morally right and professionally acceptable in a specific context.

Effective Distribution Channels

Networks or pathways through which a company's products or services are marketed and delivered to its customers efficiently.

Social Shopping Experience

The integration of social networking and e-commerce, where users can share, recommend, and discuss products within their social networks during the shopping process.