The Idea Behind the Pollution Tax Equal to the External

question 95

Multiple Choice

The idea behind the pollution tax equal to the external cost per unit of pollution is to

• A) increase the social benefit to be above the marginal cost.
• B) internalize the externality.
• C) allow the firm to evade external costs.
• D) drive polluting firms out of developed countries.

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Definitions:

Egalitarian

Egalitarian refers to a belief in or practice of equal rights and opportunities for all people, opposing hierarchy and inequalities.

Permanent

Describes something that is intended to exist or last indefinitely without change, ending, or expiry.

Extended Family

Expands the nuclear family “vertically” by adding another generation—one or more of the spouses’ parents—to the household.

Same Household

Refers to individuals who reside in the same dwelling, sharing living quarters and daily lives, often related by blood, marriage, or legal ties.