Which of the following government actions is appropriate in a market with an external benefit?
A) taxes
B) vouchers
C) marketable permits
D) setting a tax equal to the transactions costs
E) price ceiling
Question 2
Government assistance to farmers, which seeks to maintain a target price by buying surplus output, results in
A) higher prices and less food for consumers.
B) higher prices and more food for consumers.
C) lower prices and less food for consumers.
D) lower prices and more food for consumers.
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