If the government overcorrected in a situation of external costs
a. More than the efficient amount of the good would end up being produced
b. Less than the efficient amount of the good would end up being produced.
c. It would result in a welfare cost in that market that was bigger than the initial welfare cost.
d. Both a and c are would result.
a
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An automobile company has two factories, one in Vietnam and one in Australia each with the same number of workers. The Vietnamese factory can produce either 150 engines or 100 transmissions per day
The Australian factory can produce either 100 engines or 75 transmission per day. A) The Vietnamese factory has an absolute advantage producing both engines and transmissions. B) The Australian factory has an absolute advantage in the production of transmissions. C) The Vietnamese factory has a comparative advantage in the production of transmissions. D) Which factory has an advantage is irrelevant since the theory of comparative advantage only applies to countries, not companies.
In general, the multiplier effect applies to changes in government spending but not to changes in taxation
a. True b. False Indicate whether the statement is true or false