When a Negative Externality Is Present in a Market,when a Tax

question 83

Multiple Choice

When a negative externality is present in a market,when a tax is imposed,it is:

• A)efficient,because the net benefit of buying another unit is zero for all market participants.
• B)inefficient,because the net benefit of buying another unit is zero for all market participants.
• C)efficient,because the government mandates the efficient quantity without regard for net benefits.
• D)inefficient,because the government mandates the efficient quantity without regard for net benefits.

---

Definitions:

Island Arcs

Curved chains of volcanic islands that form along subduction zones at the edges of tectonic plates in the ocean.

Continental Rifts

Areas where the Earth's crust is stretching and splitting apart, leading to the formation of new oceanic crust.

Felsic

Refers to igneous rocks that are rich in silica and light in color, including granite and rhyolite.

Mafic Magma

Refers to a type of magma that is rich in magnesium and iron, characterized by its dark color and low viscosity.