If the Marginal Private Benefit from Consuming a Good Is

Multiple Choice

If the marginal private benefit from consuming a good is $5 and the marginal social benefit from the consuming the good is $7, then the marginal external benefit from consuming the good is _____, and the government must _____ the consumption of the good to ensure that the socially optimal amount of the good is purchased.

A) $12; tax
B) $12; subsidize
C) $2; tax
D) $2; subsidize