In Order for Pollution Taxes to Be Effective in Eliminating

question 79

Multiple Choice

In order for pollution taxes to be effective in eliminating the deadweight loss resulting from pollution,the pollution tax must be set equal to the

• A) marginal private cost.
• B) marginal external cost.
• C) marginal social cost.
• D) marginal benefit of polluting.
• E) price of the good.

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Definitions:

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with quick assets, excluding inventory.

Financial Data

Information related to the financial status of an individual or organization, including income, expenses, assets, and liabilities.

Acid-Test Ratio

A financial metric that measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Financial Data

Numerical information related to monetary transactions, financial status, and performance of a company, used for analysis and decision-making.