Assume that production from an electric utility caused acid rain. If the government imposed a tax on the utility equal to the marginal external cost of the acid rain, the government's action would
A) internalize the externality.
B) externalize the externality.
C) result in a marginal social benefit greater than the marginal cost of the electricity.
D) be an example of supply-side economic policy.
Question 2
Dr. Goldfinger decides to invest in companies which he believes can improve the productivity and efficiency of health care services. How can Dr. Goldfinger strive to achieve this productive efficiency?
A) by investing in companies that fairly distribute their products and services
B) by investing in companies that produce goods and services based on consumer preferences
C) by investing in companies that produce up to the point where the marginal benefit of the last unit produced is equal to the marginal cost of producing it
D) by investing in companies that produce goods and services at the lowest possible cost
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