-In the figure above, if an excise tax is imposed that generates an efficient allocation of resources, then the amount of output will be
A) zero.
B) 50 units.
C) 150 units.
D) 250 units.

Question

-In the figure above, if an excise tax is imposed that generates an efficient allocation of resources, then the amount of output will be
A) zero. 
B) 50 units. 
C) 150 units. 
D) 250 units.

Quizplus · Accepted Answer

An efficient allocation of resources occurs where the marginal cost equals the marginal benefit. In the context of the figure, this typically corresponds to the equilibrium quantity before the tax, which is often 150 units.

-In the Figure Above, If an Excise Tax Is Imposed