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:

Pyridium

A medication used to relieve symptoms caused by irritation of the urinary tract, such as pain, burning, and the urge to urinate.

Jaundice

A yellowish discoloration of the sclera and skin due to the presence of bile pigments in the blood.

Opaqueness

The quality of being difficult to see through or understand, often referring to materials that light cannot pass through or to information that is not transparent.

Decant

The process of gently pouring a liquid from one container to another, typically to separate it from settled sediment.