UNIT 08 / GOVERNMENT MICROECONOMIC INTERVENTION

Government policies to achieve efficient resource allocation and correct market failure8.1 test

100 questions with explanations after each answer.

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QUESTION 01 / 100Easy

A factory creates a negative production externality. Which condition would make an indirect tax most closely internalise the external cost?

Select one answerATax per unit equals MEC at the social optimum.BTax per unit equals MPC at the social optimum.CTax per unit equals MSC at the market equilibrium.DTax per unit equals MPB at the market equilibrium.

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1 of 100

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Question 1