Question

please help

1. Consider a market for a bidet- Wash don’t wipe. The increase use of Bidet’s would imply a decrease of toilet paper. Toilet Paper has detrimental environmental impact: loss of trees, lots of water usage, water pollution through TP bleaching, carbon emissions from production etc. The market will tend to _____ the bidet because the market participants tend to ignore the _____ of their decision.

Under-produce; internal benefit
Overproduce; eternal cost
Under-produce; external cost
Under-produce; external benefit
Overproduce; external benefit

2. True or false: The 6% Kentucky State sales tax is assessed on tangible goods, but NOT on services.

Answer 1

1) Since the use of toilet paper produces negative eternality, the use of Bidet would be such that there would be underproduction as the participants would tend to ignore the external benefit of their decision

option(D)