An International Externality

question 30

Multiple Choice

An international externality

• A) refers to a spillover effect that results exclusively from international trade barriers
• B) arises from transboundary pollution
• C) can be modeled as the MEC of production when it affects more than one nation
• D) all of the above
• E) (b) and (c) only

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating how much of any additional income will be paid in taxes.

Taxable Income

The portion of an individual's or entity's income that is subject to taxation by governmental authorities.

Average Tax Rate

The proportion of total taxable income paid in taxes, calculated by dividing the total tax amount by the total income.

Excise Tax

A specific tax levied on certain goods, services, or activities, often included in the price of things like gasoline, alcohol, and tobacco.