Building infrastructure is left to the government since ________
A) the cost of such projects would not be economical for any individual firm
B) borrowing costs make such projects prohibitively expensive
C) inflation tends to erode the real value of debt
D) a natural monopoly would result if this activity were undertaken by an individual private firm
A
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Refer to Figure 5-9. Let's suppose the government imposes a tax of $50 per unit of toilet paper to bring about the efficient level of production. What happens to the market price of toilet paper?
A) It rises by more than $50 per unit. B) It rises by $50 per unit. C) It rises by less than $50 per unit. D) It remains the same because the tax is imposed on producers who create the externality.
One rationale for government involvement in health care markets is that government involvement is necessary to prevent the spread of contagious diseases, which can be a type of externality
Which of the following is not an example of a public health externality? a. The provision of vaccinations against communicable diseases. b. The provision of clean drinking water to prevent the spread of water-borne diseases. c. The elimination of pools of standing water to help prevent the spread of malaria. d. The provision of drugs to help control cholesterol, a primary factor in heart disease.