(Figure: Market Efficiency) If the socially optimal quantity of the good is 200 pounds, there is a _____ externality, so the government should enact a _____ per pound to increase market efficiency.
A) negative; $6 tax
B) negative; $1 tax
C) positive; $6 subsidy
D) positive; $1 subsidy

Question

(Figure: Market Efficiency) If the socially optimal quantity of the good is 200 pounds, there is a _____ externality, so the government should enact a _____ per pound to increase market efficiency. 
A) negative; $6 tax 
B) negative; $1 tax 
C) positive; $6 subsidy 
D) positive; $1 subsidy

Quizplus · Accepted Answer

The Answer of (Figure: Market Efficiency) If the socially optimal quantity of the good is 200 pounds, there is a _____ externality, so the government should enact a _____ per pound to increase market efficiency. 
A) negative; $6 tax 
B) negative; $1 tax 
C) positive; $6 subsidy 
D) positive; $1 subsidy

(Figure: Market Efficiency) If the Socially Optimal Quantity of the Good