With Use of _____ to Reduce Emissions, the Marginal Benefit

question 168

Multiple Choice

With use of _____ to reduce emissions, the marginal benefit of an additional unit of pollution is the same for all polluters.

• A) an environmental standard
• B) an emissions tax
• C) a tradable emissions permit
• D) an emissions tax or a tradable emissions permit

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, reflecting the goods' sensitivity to price changes.

Laffer Curve

A theory that illustrates the relationship between tax rates and the amount of tax revenue collected by governments.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or service is not achieved or is unattainable.

Tax Per Unit

A tax that is levied on a per unit basis, meaning for every unit of a good produced or sold, a certain amount of tax is paid.