Corrective Taxes Are Often Difficult to Implement Because _____

question 46

Multiple Choice

Corrective taxes are often difficult to implement because _____.

• A)those affected by the externality are often loathe to use political means to implement the tax
• B)those creating the externality threaten to shut down
• C)those who suffer from the externality refuse to talk about it
• D)the creator of an externality will use political means to try to prevent the tax

---

Definitions:

Producer Surplus

The divergence between what producers are prepared to agree on for a sale of goods or services and the resultant financial gain.

Consumer Surplus

represents the difference between what consumers are willing to pay for a good or service and what they actually pay, indicating economic welfare.

Tax Revenue

The income generated by the government through the imposition of taxes on goods, services, income, and transactions.

Opportunity Costs

The cost of the next best alternative foregone when a decision is made to choose one option over another.