The Greater the Magnitude of the External Benefits of Production

question 26

Multiple Choice

The greater the magnitude of the external benefits of production,

• A)​The larger is the deadweight loss from overproduction.
• B)​The greater would be the optimal tax.
• C)​The less the private market solution would deviate from the socially efficient level of output.
• D)​All of the above are true.

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Definitions:

Wilmot Proviso

An unsuccessful proposal in 1846 to prohibit slavery in the territory acquired by the United States at the end of the Mexican-American War.

Slave Power

A term used to describe the perceived political power held by slave owners in the United States during the 19th century, which influenced legislation and the balance of power in government.

Statehood

The condition or status of being recognized as an independent nation or a fully integrated part of an existing country, with all accompanying rights and responsibilities.