Suppose That Alcohol Consumption Creates a Negative Externality

question 353

Multiple Choice

Suppose that alcohol consumption creates a negative externality. What can the government do to equate the equilibrium quantity of alcohol and the socially optimal quantity of alcohol?

• A)impose a tax on alcohol that is equal to the per-unit externality
• B)offer a subsidy on alcohol that is equal to the per-unit externality
• C)impose a regulation limiting the amount of alcohol that each consumer can purchase
• D)nothing

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Definitions:

Dignity-Conserving Repertoire

Strategies or approaches that individuals utilize to maintain their self-respect and dignity when facing issues that could undermine their sense of self.

Social Dignity

The recognition of an individual's intrinsic worth and the respect accorded to them within a society.

Functional Independence

The ability of an individual to carry out daily activities and tasks without the need for assistance from others.

Spirits

Can refer to alcoholic beverages, or in a different context, to the non-physical aspects of a person's being, often considered to be synonymous with the soul.