Which of the Following Is Not an Advantage of User

question 41

Multiple Choice

Which of the following is not an advantage of user charges?

• A)User charges help ration consumption of the taxed good.
• B)User charges are equitable from the standpoint of the benefit principle of taxation.
• C)User charges reveal consumer preferences for the taxed good.
• D)User chargers are easy to apply in cases where the benefits are spread diffusely.

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Definitions:

Damage Cost

The monetary cost associated with the harm done to goods in an economy, which can result from disasters, accidents, or intentional acts.

Negative Externality

An adverse effect suffered by a third party as a result of an economic transaction in which they had no involvement.

Internalize

The process of incorporating the cost of externalities into the decision-making process of firms or individuals.

Marginal Social Cost

Marginal social cost is the total cost to society of producing an additional unit of a good, including both private costs and any external costs.