A Difficulty with Using a Uniform Per-Unit Tax to Address

question 55

Multiple Choice

A difficulty with using a uniform per-unit tax to address a negative externality is that

• A) the tax will reduce output.
• B) the tax will increase price.
• C) the social cost of pollution might vary across geographic regions.
• D) the social cost of pollution should not be assessed on the consumers, but should be assessed on the firms.

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Definitions:

Variance

A measure of the dispersion or spread within a set of data points, indicating the average of the squared deviations from the mean.

Median

The middle value in a data set, which separates the higher half from the lower half when the numbers are arranged in order.

Mode

Most frequently occurring score or value of a variable in a set of data.

Range

The difference between the highest and lowest values in a data set, indicating the span of data points.