The Government Can _______________ Change an Inefficient Market Outcome (In

question 81

Multiple Choice

The government can _______________ change an inefficient market outcome (in the case where there is a negative externality) into an efficient outcome by imposing a tax on the activity that generates the negative externality.

• A) in almost all situations
• B) possibly
• C) not
• D) in all situations
• E) a or d

---

Definitions:

Accumulated Depreciation

The cumulative amount of a physical asset's value that has been accounted for as depreciation since the asset was first utilized.

Partnership Investment

A contribution of assets by a partner to a partnership, often in exchange for a share of the partnership's profits.

Equipment

Assets used in the operation of a business or manufacturing process, which have a long-term use and value.

Income Ratio

A financial metric that compares various incomes to a particular benchmark, such as net income to sales or investment income to total assets.