Explain How a Pollution Tax Is Different from a Pigouvian

question 18

Essay

Explain how a pollution tax is different from a Pigouvian tax.Discuss how incentives for firms differ under the two types of taxes, and what would be required of the government if it were to structure a Pigouvian tax system to mimic the effects of a pollution tax.

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Definitions:

Pragmatists

Thinkers or philosophers who judge the truth of theories or beliefs in terms of the success of their practical application.

Subconscious

The part of the mind that is not fully aware but influences actions and feelings.

Reality

The state or quality of having existence or substance; the world or state of things as they actually exist.

Social Behaviorists

Scholars and psychologists who study how individuals' behaviors and personalities are shaped by their social environment and interactions.