Imposition of tax on an open-access resource increases the marginal private cost of using the resource by _____.
A)zero
B)the amount of the tax
C)the marginal cost of the resource
D)the average private cost of using the resource
E)the average social cost of using the resource

Question

Imposition of tax on an open-access resource increases the marginal private cost of using the resource by _____.​
A)zero
B)the amount of the tax​
C)the marginal cost of the resource​
D)the average private cost of using the resource
E)the average social cost of using the resource

Quizplus · Accepted Answer

Imposition of tax on an open-access resource increases the marginal private cost of using the resource by the amount of the tax. This is because the tax is an additional cost that the user must pay to utilize the resource, thus increasing the overall cost of usage.

Imposition of Tax on an Open-Access Resource Increases the Marginal