-In Order for Pollution Taxes to Be Effective in Eliminating

question 20

Multiple Choice

-In order for pollution taxes to be effective in eliminating the deadweight loss resulting from pollution, the pollution tax must be set equal to the

• A) price of the good.
• B) marginal private cost.
• C) marginal external cost.
• D) marginal benefit of polluting.
• E) marginal social cost.

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Definitions:

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Offering satisfaction, happiness, or benefit, especially in response to an action performed.

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