If in an Attempt to Correct an Externality the Government

question 131

Multiple Choice

If in an attempt to correct an externality the government sets a Pigouvian tax too high, the equilibrium quantity will be:

• A) higher than the efficient quantity.
• B) lower than the efficient quantity.
• C) equal to the efficient quantity.
• D) zero.

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Definitions:

First Speed Clutch

A component in a transmission system that engages to allow the vehicle to operate in its lowest gear.

Output Ratio

The ratio of the gearbox's output speed to its input speed, fundamentally impacting vehicle performance.

Fifth Gear

A higher gear in manual or automatic transmissions, allowing the vehicle to maintain high speed while reducing engine RPM for fuel efficiency.

Hydromechanical

Refers to systems or components that combine hydraulic and mechanical processes to perform their functions, often found in engineering and aviation.