Consider a Setting in Which There Is a Negative Externality,but

question 73

Multiple Choice

Consider a setting in which there is a negative externality,but no positive externality.The market outcome is __________________; government can bring about the ___________________ outcome if it sets a tax equal to the __________________.

• A) efficient; inefficient; MSC
• B) efficient; inefficient; MEC
• C) inefficient; efficient; MEC
• D) inefficient; efficient; MPC
• E) inefficient; efficient; MSB

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Definitions:

Distribution

The process of making a product or service available for use or consumption by a consumer or business user, using direct or indirect means.

Economy of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Small Manufacturers

Companies engaged in the production of goods on a smaller scale, often characterized by more specialized products or services.

Cottages

Small, typically cozy houses, often located in rural or vacation settings, and sometimes used as secondary homes or vacation retreats.