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Table 10-4 Quantity Private Value Private Cost External Cost (Units) (Dollars) (Dollars) (Dollars) 1 46 21 6 2 44 24 6 3 42 22 4 40 40 27 6 30 5 38 33 6 6 36 36 6 7 34 39 6 Refer to Table 10-4.Which of the following policies would move the market from the market equilibrium to the socially optimal equilibrium? a. A tax of $4 per unit of output b. A subsidy of $4 per unit of output C. A tax of $6 per unit of output d. A subsidy of $6 per unit of output

Table 10-4 Quantity Private Value Private Cost External Cost (Units) (Dollars) (Dollars) (Dollars) 1 46 21 6 2 44 24 6 3 42 22 4 40 40 27 6 30 5 38 33 6 6 36 36 6 7 34 39 6 Refer to Table 10-4.Which of the following policies would move the market from the market equilibrium to the socially optimal equilibrium? a. A tax of $4 per unit of output b. A subsidy of $4 per unit of output C. A tax of $6 per unit of output d. A subsidy of $6 per unit of output

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 2PA
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Am. 109.

Table 10-4 Quantity Private Value Private Cost External Cost (Units) (Dollars) (Dollars) (Dollars) 1 46 21 6 2 44 24 6 3 42 22 4 40 40 27 6 30 5 38 33 6 6 36 36 6 7 34 39 6 Refer to Table 10-4.Which of the following policies would move the market from the market equilibrium to the socially optimal equilibrium? a. A tax of $4 per unit of output b. A subsidy of $4 per unit of output C. A tax of $6 per unit of output d. A subsidy of $6 per unit of output
Transcribed Image Text:Table 10-4 Quantity Private Value Private Cost External Cost (Units) (Dollars) (Dollars) (Dollars) 1 46 21 6 2 44 24 6 3 42 22 4 40 40 27 6 30 5 38 33 6 6 36 36 6 7 34 39 6 Refer to Table 10-4.Which of the following policies would move the market from the market equilibrium to the socially optimal equilibrium? a. A tax of $4 per unit of output b. A subsidy of $4 per unit of output C. A tax of $6 per unit of output d. A subsidy of $6 per unit of output
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