Multiple Choice
Which of the following statements are TRUE?
I. Market prices do not correctly signal the true costs and benefits to society when external costs are present.
II. Market prices do not correctly signal the true costs and benefits to society when external benefits are present.
III. Taxes and subsidies can adjust prices so that they do send the correct signals.
A) I and III only
B) II and III only
C) I only
D) I, II, and III
Correct Answer:
Verified
Correct Answer:
Verified
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