Multiple Choice
Which of the following statements is false?
A) In the case of a negative externality,the market equilibrium is inefficient.
B) In the case of a negative externality,when a tax is set equal to the marginal external costs (MEC) efficiency can be achieved.
C) In the case of a negative externality,when a tax is set that is greater than the marginal external costs (MEC) inefficiency will result.
D) In the case of a positive externality,when a tax is set equal to the marginal external benefits (MEB) efficiency can be achieved.
Correct Answer:
Verified
Correct Answer:
Verified
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