What Would Happen If the Government Tries to Internalize an Externality,generated

question 5

Multiple Choice

What would happen if the government tries to internalize an externality,generated from the production of a commodity,through taxation?

• A)The commodity will be overproduced
• B)The commodity will definitely be underproduced
• C)The market level of output will coincide with the efficient level
• D)The price of the commodity will decline

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Definitions:

Vaccinations

Medical procedures that involve administering a vaccine to stimulate an individual's immune system to develop resistance to a specific infectious disease.

Autism

A developmental disorder characterized by difficulties in social interaction and communication, and by restricted or repetitive patterns of thought and behavior.

Non-directional

A hypothesis that specifies a difference or relationship but not the direction, stating only that one doesn't expect to find equality.

Independent Variable

A variable in a scientific experiment that is manipulated or changed to observe its effect on a dependent variable.