Which One of the Following Statements About Illegal Goods Is

Multiple Choice

Which one of the following statements about illegal goods is true?

A) Taxes are more effective in changing preferences than prohibition.
B) Prohibition is more effective in generating revenue than an equivalent tax.
C) Taxes and penalties cannot be set to yield equivalent outcomes.
D) Taxes generate revenues while prohibition sends a signal that might influence preferences.
E) Taxes and prohibition eliminate the market for illegal goods.