When the production of a good creates an external cost, one method of achieving the efficient allocation is to impose a tax such that

Alcohol prohibition in the United States

A) abolished the production of liquor. B) abolished the consumption of liquor. C) abolished the distribution of liquor. D) accomplished all of the above. E) accomplished none of the above.

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that

A) Beth should produce both goods because she can produce more of both goods in an hour than can Joe. B) Beth should produce sandwiches and Joe should produce pizza. C) Beth should produce pizza and Joe should produce sandwiches. D) Beth should produce both goods and Joe should produce sandwiches.