Which of the Following Will Eliminate the Inefficiency Problems Associated

question 7

Multiple Choice

Which of the following will eliminate the inefficiency problems associated with negative externalities?

• A) A subsidy to consumers in order to decrease the effective price and increase output.
• B) A tax levied on consumers so as to increase the effective price.
• C) A tax levied on producers so as to internalize the marginal cost of the externality.
• D) A subsidy to producers in order to reduce their cost of production.
• E) A government mandate using quantity standards to reduce the externality.

---

Definitions:

College Admissions

The process through which students enter tertiary education at colleges and universities, often involving eligibility criteria and selection processes.

Minority Groups

Demographic groups within a society that are smaller in number and often experience differential treatment or discrimination because of cultural, ethnic, or other differences.

Racialization

A process whereby some social category, such as a social class or nationality, is assigned what are perceived to be race characteristics.

Racial Formation

Process by which groups come to be defined as a “race” through social institutions such as the law and the schools.