Multiple Choice
Assume that production from an electric utility caused acid rain.If the government imposed a tax on the utility equal to the cost of the acid rain, the government's action would
A) externalise the externality.
B) result in a marginal social benefit greater than the marginal cost of the electricity.
C) be an example of supply side economic policy.
D) internalise the externality.
Correct Answer:
Verified
Correct Answer:
Verified
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