Which of the Following Are TRUE About Environmental Taxes: 1

question 34

Multiple Choice

Which of the following are TRUE about environmental taxes: 1. they are a type of incentive based regulation for pollution control
2. they are a type of command and control regulation for pollution control
3. they are designed to be equal to the external cost of pollution

• A)1 only
• B)2 only
• C)3 only
• D)1 and 3

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Definitions:

Price-inelastic

Price-inelastic describes a situation where the demand for a good or service is relatively unaffected by changes in its price, indicating that consumers continue to purchase it even if the price increases.

University of Michigan

A public research university located in Ann Arbor, Michigan, known for its rigorous academic programs and significant contributions to research.

Lowest Price Elasticity

Refers to the scenario where the demand for a good or service is least responsive to changes in price.

Estimating Price Elasticity

The process of determining how sensitive the quantity demanded of a good is to a change in its price.