Question

g When the government levies a tax on a good equal to the external cost associated with the good’s production, it ________ the price paid by consumers and makes the market outcome ________ efficient.

Answer 1

Answer:

The answers are increases and more.

Explanation:

When the government levies a tax on a good equal to the external cost associated with the good’s production, it ___increases_____ the price paid by consumers and makes the market outcome __more______ efficient

Because that is the imposition of tax on the external cost created by a commodity will lead to an increase in the price of the commodity. When the government imposes tax on goods equal to the external cost, it leads to the market outcome becoming more efficient.