If the Government Taxes a Good That Generates a Negative

question 65

Multiple Choice

If the government taxes a good that generates a negative externality, then the government:

• A)will generate tax revenue, but lower economic surplus.
• B)can increase total economic surplus, but tax revenue will fall.
• C)can increase total economic surplus and generate tax revenue.
• D)will neither increase total economic surplus nor generate tax revenue.

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Definitions:

Neurotransmitters

Chemicals that transmit signals across a synapse from one neuron to another in the nervous system.

Neuron

A specialized cell of the nervous system that transmits signals electrically and chemically throughout the body.

Action Potential

A temporary reversal of an electric polarization of the membrane in nerve or muscle cells.

Electrical Signal

An electrical signal is a current or electromagnetic field used to convey data from one system or network to another, often varying in voltage to represent information.