In Which of the Following Ways Are Pigovian Taxes and Pollution

question 161

Multiple Choice

In which of the following ways are Pigovian taxes and pollution permits similar?
(i) in both cases, firms pay for their pollution.(ii) both internalise the externality of pollution by making it costly to pollute.(iii) each policy allows for a market-based solution.

• A)(i), (ii) and (iii)
• B)(i) and (iii) only
• C)(ii) only
• D)(ii) and (iii) only

---

Definitions:

μ

The symbol denoting the population mean in statistics, representing the average of a set of values.

Sampling Distribution

The probability distribution of a given statistic based on a random sample, used to make inferences about the population.

Mean

The arithmetic average of a set of numbers, calculated by dividing the sum of the values by the count of the values.

Population Mean

The average value of all elements in an entire population, representing a summary measure of the central tendency of the population.