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Suppose That the Government of NSW Promises to Decrease Taxes

Question 81

Multiple Choice

Suppose that the government of NSW promises to decrease taxes for a firm if it decides to stay in NSW instead of moving to Victoria. This policy on the part of the state constitutes _______, to make the _______ of the firm remaining in NSW.


A) an incentive; marginal benefit exceed the marginal cost
B) a command; marginal cost exceed the marginal benefit
C) a command; marginal benefit exceed the marginal cost
D) an incentive; marginal cost exceed the marginal benefit

Correct Answer:

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