A Tax on a Polluting Activity Could Internalize the Externality

question 23

Multiple Choice

A tax on a polluting activity could internalize the externality if it were set equal to the

• A)average cost of the pollution.
• B)marginal cost of the pollution.
• C)total cost of the pollution.
• D)moral cost of the pollution

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Definitions:

Percentile

Percentile is a statistical measure indicating the value below which a given percentage of observations in a group of observations fall, often used in growth charts and test scores to compare an individual’s performance to a population.

Newborn

A baby from birth to about two months of age, during the initial phase of life outside the womb.

Pediatrician

A medical doctor specializing in the physical, behavioral, and mental care of children from birth until adolescence.

Slow-wave Sleep

A deep sleep phase characterized by slow brain waves, important for physical restoration and memory consolidation.