Pollution Taxes Are More Efficient in Cleaning Up the Environment

question 181

Multiple Choice

Pollution taxes are more efficient in cleaning up the environment than direct controls.What role is there for direct controls?

• A)They are useful standby mechanisms.
• B)They are useful if it is decided to prohibit the substance altogether.
• C)They are useful where dependable metering devices are not available or prohibitively costly to install.
• D)All of the above are true.

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Definitions:

Tax Amount

The total sum of money required by a government from individuals or businesses as a form of revenue.

Deadweight Loss

A loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved.

Excise Tax

A tax charged on specific goods, services, and activities, such as gasoline, alcohol, and gambling.

Tax Burden

The impact of taxation on an individual or entity, often measured as a proportion of income or revenue.