A Pigouvian Tax Is Equal to

question 35

Multiple Choice

A Pigouvian tax is equal to

• A)the price that reduces pollution to zero.
• B)the marginal damage done at the efficient level of output.
• C)the social marginal cost.
• D)the marginal benefit done at the efficient level of output.

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Definitions:

Negotiable

Capable of being transferred from one party to another in exchange for something of value, typically used in the context of financial instruments.

Acceleration Clause

A provision in a loan agreement that allows the lender to demand immediate repayment of the balance if certain conditions are not met.

Negotiable Instrument

A financial document, such as a check or promissory note, that contains an unconditional promise or order to pay a specified amount of money, easily transferable from one party to another.

Acknowledges The Debt

The act of a debtor formally admitting the existence or validity of a debt owed to a creditor.