If a Good Has an External Benefit, Efficiency Can Be

question 10

Multiple Choice

If a good has an external benefit, efficiency can be achieved by

• A) leaving the market unregulated.
• B) monopolising the market.
• C) imposing a tax on the good equal to the external benefit.
• D) offering a private subsidy on the good equal to the external benefit.

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Definitions:

West Germany

The name for the Federal Republic of Germany during the period between its formation in 1949 and German reunification in 1990.

Italy

A country in Southern Europe, known for its rich history, art, culture, and influential role in the world economy and politics.

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