When a Pigouvian tax is imposed, ________. A) the marginal ...

[iveyjurea]

When a Pigouvian tax is imposed, ________.
 
  A) the marginal private cost curve shifts upward
  B) the demand curve shifts rightward
  C) the marginal social cost curve shifts downward
  D) the marginal social benefit curve shifts downward

Question 2

For a government subsidy on a good with an external benefit to result in the efficient amount of output being produced, what must be done?
 
  A) The size of marginal external benefit must be accurately determined.
  B) The government must produce the product.
  C) Private production and private consumption must both be directly subsidized.
  D) The quantity demanded must be decreased to the efficient amount.
  E) Private production without the subsidy must be prohibited.

[lorealeza]

Answer to Question 1

A

Answer to Question 2

A