Limitations of a Pigouvian Tax Include

question 26

Multiple Choice

Limitations of a Pigouvian tax include:

• A) difficulty of measuring the externality
• B) difficulty of measuring economic damage of the externality
• C) difficulty of measuring societal preferences for reduction of the externality
• D) all of the other three answers

---

Definitions:

Conscientiousness

A personality trait characterized by diligence, carefulness, and a desire to do a task well.

Perception Process

The cognitive process that enables us to interpret and understand our surroundings through the data acquired by our sensory organs.

Pollyanna Principle

The tendency for people to remember pleasant items more accurately than unpleasant ones, influencing a generally optimistic worldview.

Perceptual Selection

The process by which individuals filter and interpret sensory information to create a meaningful experience of the world.