Author Question: When external costs are present and the government imposes a tax equal to the marginal external ... (Read 118 times)

ishan · **on:** Jun 29, 2018

When external costs are present and the government imposes a tax equal to the marginal external cost, then

A) efficiency can be achieved.
B) transaction costs will be high.
C) the marginal benefit of the external cost will fall.
D) property rights must have already been established.

Question 2

The figure above shows a perfectly competitive firm. When the firm maximizes its profit, its total cost is

A) 1,200.
B) less than 1,200 but more than zero.
C) more than 1,200.
D) zero.