Suppose a Pigovian Tax Is Imposed on a Market That

question 178

Short Answer

Suppose a Pigovian tax is imposed on a market that is characterized by one or more externalities. Is this a command-and-control policy or is it a market-based policy?

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Definitions:

Desirable Location

A geographic area considered attractive for living or business activities due to various factors such as accessibility, environment, or economic opportunities.

Unstable Work Opportunities

Employment situations that are irregular, unpredictable, and precarious, often without long-term security or benefits.

Hourly Wages

The rate of pay employees receive for one hour of work.

Market Equilibrium

A state in a market where supply equals demand, resulting in stable prices and no tendency for change until external factors impose it.