Pollution Taxes Reduce Pollution by

question 403

Multiple Choice

Pollution taxes reduce pollution by

• A) decreasing the amount of the good sold that causes the pollution.
• B) causing firms to produce less of the good that generates the pollution.
• C) encouraging firms to modify their production process to reduce emissions.
• D) all of the above.

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Definitions:

Income Distribution

How total earnings are distributed across individuals or households within an economy.

Equal Slices

A method of dividing or allocating resources, goods, or profits evenly among all parties or members.

Corporate Stock Holdings

The shares of a corporation held by an individual, group, or another corporation, representing ownership interests.

Household Income

The total pre-tax earnings received by members of a household from all sources in a given period.