In Order to Bring a Market to Its Efficient Outcome

question 102

Multiple Choice

In order to bring a market to its efficient outcome when a negative externality is present, the government might:

• A)limit total consumption to the efficient quantity.
• B)tax the buyers or sellers in the market at the value of the external cost.
• C)limit the price of the good or service to its efficient level.
• D)All of these are actions the government might take to bring about an efficient outcome.

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Definitions:

EGO

The part of the mind that mediates between the conscious and the unconscious and is responsible for reality testing and a sense of personal identity.

Nuclear Family

A family unit consisting of two parents and their children living together as a single household, traditionally seen as a societal norm.

Grandmother

A female family member who is the mother of one's parent, often playing a significant role in family support and heritage.

EGO

A part of the psychoanalytic theory of personality, representing the realistic part that mediates between the desires of the ID and the super-ego.