A Pigovian Tax on Pollution

question 56

Multiple Choice

A Pigovian tax on pollution

• A) sets the quantity of pollution.
• B) reduces the incentive for technological innovations to further reduce pollution.
• C) sets the price of pollution.
• D) determines the demand for pollution rights.

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Definitions:

Dividing

refers to the mathematical operation of partitioning a quantity into equal parts or groups.

Long-Term Trend

The persistent movement in data or a market's price, productivity, or other economic indicators over an extended period.

Unemployment

The situation in which individuals capable of working and actively seeking employment remain jobless.

Downward Trend

A sustained decrease in a particular economic indicator, such as stock prices, GDP, or employment levels, over a period time.