A Corrective Tax

question 212

Multiple Choice

A corrective tax

• A) can be used to internalize a negative externality.
• B) imposed on sellers shifts the supply curve to the left.
• C) imposed on buyers shifts the demand curve to the left.
• D) All of the above.

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Definitions:

Variable Component

Part of a cost or expense that varies directly with the level of activity, production, or sales.

Inspection Cost

Expenses associated with the activity of checking and verifying the quality or standards of products or materials.

Mixed Cost

Mixed cost is an expense that has both fixed and variable components, meaning it changes with the level of activity but also incurs a base cost.

Least-squares Regression

A statistical method used to determine the line of best fit by minimizing the sum of squares of the errors between the observed and predicted values.