A per- unit tax placed on the employment of a particular input in one of many regions will lead to:
A)a point which is inside the production possibilities frontier.
B)decrease in output prices.
C)a corner solution on the production possibilities frontier.
D)inefficiency in consumption.

Question

Quizplus · Accepted Answer

A per-unit tax on an input increases the cost of production, potentially leading to underutilization of resources and resulting in a point inside the production possibilities frontier, indicating inefficiency in production.

A Per- Unit Tax Placed on the Employment of a Particular