An Emissions Tax Can Bring About an Efficient Solution to the Pollution

question 21

Multiple Choice

An emissions tax can bring about an efficient solution to the pollution problem because it:

• A) forces firms to bear the full cost of the tax.
• B) forces both firms and households to bear the full cost of their decisions.
• C) eliminates the external cost associated with pollution.
• D) allows government agencies to use benefit-cost analysis to determine the efficient level of pollution.