If the Government Taxes a Firm That Is Generating an External

question 91

Multiple Choice

If the government taxes a firm that is generating an external cost,the price of the firm's product will ________ and output will ________.

• A) increase; decrease
• B) increase; increase
• C) decrease; decrease
• D) decrease; increase

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Definitions:

Antacids

Medications that neutralize stomach acid to relieve symptoms of heartburn and indigestion.

Antiemetic

A drug or medication used to prevent or treat nausea and vomiting.

Anticoagulants

Substances that prevent clotting.

Lovenox

A brand name for enoxaparin, an anticoagulant medication used to prevent and treat blood clots.