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:

Normal Distribution

A statistical distribution which is evenly spread around the mean, indicating that occurrences close to the mean are more common than those further away.

Frequency Distributions

Showcases how often each different value in a set of data occurs.

Normal Distributions

A distribution that resembles the shape of a bell, symmetrically centered around the average, indicating that values close to the mean are more commonly observed than those further away from the mean.

Skewed

Describes a distribution of data that is asymmetrical, where the bulk of the values lie on one side of the mean, either to the right (positive skew) or to the left (negative skew).