Which of the Following Is a Cost of Internalizing a Negative

question 9

Multiple Choice

Which of the following is a cost of internalizing a negative externality?

• A) Less output is produced.
• B) The deadweight loss is larger.
• C) The level of pollution rises.
• D) Taxes must increase to cover the external cost.
• E) The government must pay firms to encourage them to change production techniques.

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Definitions:

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