The Response of Output Following a Natural Disaster Includes

question 68

Multiple Choice

The response of output following a natural disaster includes

• A)a decrease in output demand and an increase in output supply.
• B)a decrease in output demand and a decrease in output supply.
• C)only a decrease in output demand.
• D)an increase in output demand and an increase in output supply.
• E)an increase in output demand and a decrease in output supply.

---

Definitions:

Optimal Tax Rate

The tax rate that efficiently balances revenue generation for government purposes with minimal economic distortion or disincentive for economic activity.

Marginal Social Benefit

The increased value to society resulting from the consumption or production of one more unit of a good or service.

External Benefit

A benefit that affects people other than the direct consumers or producers of a good or service, often leading to positive spillover effects.

Negative Externality

A situation where a third party suffers from a transaction or activity they are not directly involved in, often leading to market failure if not corrected by government intervention.