Taxes Can Yield the Efficient Level of Pollution If the Tax

question 70

Multiple Choice

Taxes can yield the efficient level of pollution if the tax is set equal to the

• A) marginal external cost of the pollution.
• B) marginal social cost of the pollution.
• C) equilibrium price of the pollution.
• D) marginal benefit of pollution.

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Definitions:

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the liquidity and short-term financial health of the company.

Accounts Payable

Money owed by a business to its suppliers for goods or services received that have not been paid for.

Current Liability

A company's debts or obligations that are due to be paid to creditors within one year.

Shortage Costs

Expenses incurred from not having enough inventory on hand, including lost sales, backorder processing, and dissatisfied customers.