Which of the Following Will Eliminate the Inefficiency Problems Associated

Multiple Choice

Which of the following will eliminate the inefficiency problems associated with negative externalities?

A) A subsidy to consumers in order to decrease the effective price and increase output.
B) A tax levied on consumers so as to increase the effective price.
C) A tax levied on producers so as to internalize the marginal cost of the externality.
D) A subsidy to producers in order to reduce their cost of production.
E) A government mandate using quantity standards to reduce the externality.