Economists Propose That a Tax Intended to Correct for the Presence

question 82

Multiple Choice

Economists propose that a tax intended to correct for the presence of an externality should be based on:

• A)the action that creates the externality, rather than the externality itself.
• B)the externality itself, rather than the action that creates it.
• C)what is simplest to implement.
• D)what will likely generate the most revenue.

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Definitions:

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, usually set before the experiment.

Seat Belts

Devices aimed at protecting vehicle passengers from injurious motions that might occur in the event of an accident or abrupt halt.

Chi-Squared Test

A statistical test used to determine if there's a significant difference between the observed frequencies and the expected frequencies in one or more categories.

Nominal Variables

Categorical variables that represent qualitative data with no intrinsic ordering or ranking between the categories.