Which of the Following Statements About a Pigovian Tax Is

question 32

Multiple Choice

Which of the following statements about a Pigovian tax is true? If the amount of the tax is equal to the external cost, deadweight loss will be zero. The tax must be placed on producers. The tax moves the market quantity closer to the efficient quantity.

• A)I only
• B)II and III only
• C)I and III only
• D)I, II, and III

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Definitions:

Bond

A fixed income instrument representing a loan made by an investor to a borrower, typically corporate or governmental, which pays back with interest.

Interest Rate

The percentage of an amount of money charged by a lender to a borrower for the use of assets over a specific period.

Antique

An old collectible item that is valued because of its aesthetic or historical significance, often considered to be at least 100 years old.

Pleasure

The feeling of happiness or satisfaction resulting from an enjoyable activity or sensory experience.