A Tax on an Externally Costly Activity Is ______ Command

question 88

Multiple Choice

A tax on an externally costly activity is ______ command and control regulation that seeks to limit the activity.

• A) more efficient than
• B) less efficient than
• C) equally efficient as
• D) sometimes more and sometimes less efficient than

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Definitions:

Normal Good

A good whose demand increases as consumers' income rises, holding all other factors constant.

Consumption

Consumption refers to the use of goods and services by households. It is a primary component of the economy, encompassing the spending on goods and services by consumers.

Income

Money received, especially on a regular basis, for work or through investments.

Income Effect

The change in an individual's or economy's income and how that change will affect the quantity demanded of a good or service.