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Suppose a Tax Equal to the Value of the Marginal

question 29

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Suppose a tax equal to the value of the marginal external cost at the optimal output is imposed on a pollution generating good.All of the following will result from the tax except


Definitions:

Independent Variable

The factor or condition that researchers manipulate in an experiment to explore its impact on a dependent variable.

Dependent Variable

In research and experiments, it is the outcome factor that is measured to see if it changes as a result of the manipulation of the independent variable.

Experimental Research

A systematic and scientific approach to research in which the researcher manipulates one or more variables to determine their effect on a certain outcome.

Confounding Variables

Factors other than the independent variable that might influence the outcome of an experiment, making it difficult to isolate the effect of the independent variable.

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