If a Pigovian Tax Is Not Large Enough,the Resulting Market

question 68

Multiple Choice

If a Pigovian tax is not large enough,the resulting market quantity:

• A) will be equal to the efficient quantity.
• B) will be more than the efficient quantity.
• C) will be less than the efficient quantity.
• D) will be where the social marginal cost equals the social marginal benefit.

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Definitions:

Non-Business Organization

An entity that operates for purposes other than making a profit, such as charities, educational institutions, and government agencies.

Restrictive Funds

Funds that are designated for a specific purpose by donor requirements or legal obligations, restricting general use by the recipient.

Collective Goods

Goods or services that provide benefits to all members of a community or society, typically provided by the government and not easily restricted to individual users.

Tangible Capital Assets

Physical assets owned by a firm that are used in its operations and likely to provide future economic benefits, including buildings, machinery, and equipment.