If Consumers of Common Resources Were Subject to a Tax

question 94

Multiple Choice

If consumers of common resources were subject to a tax equal to the external costs imposed due to the negative externality created:

• A)an efficient level would be reached.
• B)total surplus would be maximized for society.
• C)individuals would consume less.
• D)All of these are true.

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Definitions:

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts to check that debits equal credits in the double-entry accounting system.

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Accounts Payable

The amount a company owes to suppliers or vendors for goods or services received but not yet paid for.

Common Stock

Equity securities that represent ownership interests in a corporation, providing voting rights and potential dividends to shareholders.