Correcting a Market with an Externality Through Taxation Is _________

question 40

Multiple Choice

Correcting a market with an externality through taxation is _________ correcting it through a quota.

• A) more efficient than
• B) less efficient than
• C) just as efficient as
• D) Any of these statements could be true depending on whether the tax is imposed on the buyer or seller.

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Definitions:

Economic Activity

Actions that involve the production, distribution, and consumption of goods and services within an economy.

Independent Agency

A governmental body that operates independently from the executive branch and is not subject to its direct control.

State

A politically organized body of people usually occupying a definite territory; especially one that is sovereign.

Local Government Employees

Workers employed by municipal, county, or district authorities to provide services at the local level, including education, public safety, and infrastructure maintenance.