Multiple Choice
The external costs of alcohol consumption are related to, among other things, death and injury related to auto accidents caused by drunk drivers.These costs have been estimated to be about 47 cents per ounce of alcohol consumed.Taxes on alcohol amount to 23 cents per ounce.This suggests that alcohol consumption is (i) greater than the efficient or optimal amount; (ii) should be reduced to zero to eliminate the externality.
A) i and ii
B) i not ii
C) ii not i
D) neither i nor ii
Correct Answer:
Verified
Correct Answer:
Verified
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