In the Following Graph, MPC and MSC Represent the Marginal

question 9

Multiple Choice

In the following graph, MPC and MSC represent the marginal private cost and marginal social cost of producing a good respectively. QD represents the demand for the good. Refer to the graph to answer the question. The amount of tax that the government should levy to bring output to the socially optimum level is equal to the distance between the points _____.

• A) A and B
• B) B and D
• C) B and C
• D) A and C

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Definitions:

Intimidation

The act of making others afraid or overawed, especially in order to influence their behavior or decisions.

Self-defeating Behavior

Actions or patterns of behavior that undermine one’s own success or well-being, often subconsciously.

Desire

A strong feeling of wanting or wishing for something to happen or to possess something.

Fail

The lack of success in achieving or accomplishing a desired goal or standard.