Taxes on a producing firm's spillovers
A. are simply meant to force decision makers to consider the full costs of their actions.
B. are designed primarily as a way to raise money so that the government can compensate the victims of the externality.
C. will lead to a zero level of output.
D. are designed to make it easier for economists to measure spillovers.
Answer: A
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With price on the vertical axis and quantity on the horizontal axis, economists would draw a fall in supply as
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