If Policymakers Use a Pollution Tax to Control Pollution, the Tax

question 68

Multiple Choice

If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set

• A)equal to the marginal external cost at the economically efficient level of pollution.
• B)equal to the marginal private cost of production at the economically efficient level of pollution.
• C)equal to the amount of the deadweight loss created in the absence of a pollution tax.
• D)at a level low enough so that producers can pass along a portion of the additional cost onto consumers without significantly reducing demand for the product.

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Definitions:

[H+]

The concentration of hydrogen ions in a solution, often used as a measure of the acidity of a solution, with lower values indicating higher acidity.

HBr

Hydrobromic acid, a strong acid formed by dissolving hydrogen bromide in water.

[H+]

[H+] denotes the concentration of hydrogen ions in a solution, which is a measure of the acidity or alkalinity (pH) of the solution.

K

The chemical symbol for Potassium, a soft, silver-white metal belonging to the alkali metal group of the periodic table.