In efforts to increase economic efficiency, governments should ______________ goods with external costs.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.ataxbsubsidizecdo nothing for
Question
In efforts to increase economic efficiency, governments should ______________ goods with external costs.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.ataxbsubsidizecdo nothing for
Solution 1
The correct answer is "tax". Governments should tax goods with external costs in order to increase economic efficiency. This is because the tax can help to internalize the external cost, making the price of the good more accurately reflect its true cost to society. This can lead to a more efficient allocation of resources.
Solution 2
The correct answer is "tax". Governments should tax goods with external costs in order to increase economic efficiency. This is because the tax can help to internalize the external cost, making the price of the good more accurately reflect its true cost to society.
Solution 3
The correct answer is "tax". Governments should tax goods with external costs in order to increase economic efficiency. This is because when a good has an external cost, it means that producing or consuming that good causes a cost to a third party or to society as a whole. By taxing these goods, governments can make the producers or consumers of these goods bear the full cost of their actions, which leads to a more efficient allocation of resources in the economy.
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