Exhibit 19-7 ​ Refer to Exhibit 19-7. If the Government Wants to Impose

question 5

Multiple Choice

Exhibit 19-7 ​

Refer to Exhibit 19-7. If the government wants to impose a per-unit tax in order to raise revenues, which of the depicted markets should it choose in order to maximize tax revenues?

• A)(1)
• B)(2)
• C)(3)
• D)(4)

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Definitions:

Psychogenetic Illness

Disorders that originate from psychological causes rather than physical ones, often involving symptoms without identifiable organic roots.

Collectives

Large groups of people who share common interests but may not have as much interaction or personal connection as a more tightly-knit group.

Panic

A sudden overwhelming fear or anxiety that often causes wildly unthinking behavior or mass hysteria, usually in response to a particular event or situation.

Overcrowding Disasters

Catastrophic events resulting from too many people being confined in a space that cannot safely accommodate them, often leading to injury or death.