One Problem with the Effectiveness of Pigovian Taxes Is

question 25

Multiple Choice

One problem with the effectiveness of Pigovian taxes is:

• A) the tax does not directly compensate those who are affected by the externality.
• B) knowing whether to impose it on the consumer or producer.
• C) the tax is always used to benefit those who bear the externalities.
• D) none of the above is a problem of Pigovian taxes.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them ownership interests and usually voting rights in the company.

Stock Options

are financial derivatives that give the holder the right, but not the obligation, to buy or sell stocks at a predetermined price within a specific period.

Unethical Behavior

Actions or practices that violate moral or professional standards of conduct.

Corporation

A legal entity recognized by law as separate from its owners, providing limited liability protection to its shareholders.