If a Pollution Tax Imposed on a Firm Is Smaller

question 6

Multiple Choice

If a pollution tax imposed on a firm is smaller than the external cost

• A) the externality is completely internalized.
• B) the social production cost increases by the amount of the pollution tax.
• C) the pollution tax transfers the full cost borne by people outside the firm back to the firm itself.
• D) the firm is producing too much from society's point of view.

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Definitions:

Reaction Rate

The rate at which substances transform into different substances during a chemical process.

Balanced Equation

A chemical equation where the number of atoms for each element is the same on both the reactant and product sides.

HCl Loss

A chemical process or reaction that results in the removal or release of hydrochloric acid (HCl) from a compound or mixture.

NaCl Formation

The process of creating sodium chloride, commonly known as table salt, through the chemical reaction of sodium and chlorine.