Which of the Following Is NOT an Advantage of Taxing

question 5

Multiple Choice

Which of the following is NOT an advantage of taxing negative externalities?

• A) It is often difficult to accurately measure external costs such as pollution costs.
• B) The tax provides a financial incentive for a firm to decrease the level of the negative externality.
• C) Taxes force the producer of the externality to pay for the cost of the externality.
• D) The tax internalises the externality.

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Definitions:

Service Firms

Companies that provide intangible products or services to customers rather than physical goods.

Intangible Costs

Costs that are not directly measurable or quantifiable, such as brand value, reputation, or employee morale.

Entry-Level Training

Training designed for individuals who are new to a particular field or occupation, focusing on the basic skills and knowledge needed to begin performing their job role.