The Biggest Problem with Using a Tax as a Way

question 75

Multiple Choice

The biggest problem with using a tax as a way to solve an externality problem is that:

• A)the tax sometimes increases the external cost.
• B)damages must be estimated in financial terms to determine the correct level of the tax.
• C)the firm will pass the entire tax onto the consumer.
• D)the commerce clause forbids such taxes.

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Definitions:

Mean Absolute Deviation

Mean absolute deviation measures the average absolute distances between each data point in a set and the set's mean, providing an overview of variability.

Sum of Squares

A statistical technique used to describe the total variation in a dataset, which is the sum of the squared differences from the mean.

Mean Absolute Deviation

The average of absolute differences between each data point and the mean of the dataset.

Sum of Squares

is a statistical technique used to measure the dispersion or variability within data points.