Some policymakers have argued that products like cigarettes, alcohol, and sweetened soda generate negative externalities in consumption. If the government decided to impose a tax on soda, the government will cause
A) consumers to internalize the externality.
B) producers to internalize the externality.
C) the external cost to drinking soda to become a private cost paid by the government.
D) the external cost to drinking soda to become a private cost paid by producers.
Answer: A
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If unemployment persists for a long period of time, the natural rate of unemployment rises
Indicate whether the statement is true or false
Refer to the graph shown. Suppose the economy is initially at A but then the Fed adopts an expansionary monetary policy. The initial effect of this policy will be pressure to move the economy to:
A. E. B. B. C. C. D. D.
Gross investment minus depreciation is equal to:
A. gross domestic product. B. net investment. C. personal investment. D. nominal investment.
If demand is unit elastic, then a 10 percent increase in the price will lead to a 10 percent increase in quantity demanded.
Answer the following statement true (T) or false (F)