Those Opposed to Fracking, a Method of Extracting Natural Gas

question 307

Multiple Choice

Those opposed to fracking, a method of extracting natural gas through breaking up underground rocks with chemicals and water, warn that this method might pollute nearby sources of drinking water.
-If this pollution occurs, one way of reaching efficient production levels is by setting a Pigovian Tax. To achieve efficiency with this tax means that the tax must equal the

• A) marginal social cost.
• B) marginal private cost.
• C) marginal private benefit.
• D) marginal external cost.

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