To Eliminate the Inefficiency Resulting from Pollution That Creates an External

question 296

Multiple Choice

To eliminate the inefficiency resulting from pollution that creates an external cost,the government can impose a pollution tax on producers that is equal to the

• A) MSB.
• B) MC.
• C) marginal external cost.
• D) MSC.
• E) price.

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Definitions:

Semi-Annually

Occurring twice a year; a term often used in the context of paying interest or dividends.

Yield To Maturity

The total return anticipated on a bond if it is held until its maturity date, considering all interest payments and the principal repayment.

Par

The face value of a bond or other security, at which it can be redeemed at maturity or the amount of money equal in value to a particular share or bond.

Coupon

The yearly payment of interest to those holding bonds, represented as a percentage of the bond's nominal value.