Which of the following statements is not correct?
A)A patent is a way for the government to encourage the production of a good with technology spillovers.
B)A tax is a way for the government to reduce the production of a good with a negative externality.
C)A tax that accurately reflects social costs produces the socially optimal outcome.
D)Government policies cannot improve upon private market outcomes.

Question

Quizplus · Accepted Answer

This statement is incorrect as government policies, such as taxes or subsidies, can sometimes improve upon private market outcomes by addressing externalities or encouraging positive spillovers.

Which of the Following Statements Is Not Correct