When a Government Bans a Good

question 23

Multiple Choice

When a government bans a good:

• A)it is attempting to solve the tragedy of the commons.
• B)it makes acquiring that good illegal.
• C)the cost of breaking the ban changes the trade-offs consumers face.
• D)All of these are true.

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Definitions:

Loanable Funds

This term refers to the funds available for borrowing in the economy, which includes savings and any capital available for lending to others for investment.

Taxation

The practice of a government collecting revenues from individuals and businesses to fund public services and infrastructure.

Loanable Funds

A marketplace where individuals who save provide capital for those in need of loans.

Potential Investments

Opportunities for allocating resources with the expectation of generating a future financial return or benefit.