A Uniform Tax According to the Physical Quantities of Pollution

question 272

Multiple Choice

A uniform tax according to the physical quantities of pollution may not be the appropriate way to correct for an externality because

• A) it places a unfair burden on small producers.
• B) a uniform tax can only account for social costs and not external costs.
• C) a firm will reduce production.
• D) it may not adequately account for economic damages.

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Definitions:

Surety

A person or entity that takes responsibility for another's performance of an undertaking, such as fulfilling a contract or making a payment.

Conditional Guarantors

Parties that agree to fulfill the obligations of a defaulting party under certain conditions specified in the agreement.

Cosureties

Cosureties are multiple parties that collectively agree to be surety, sharing the liability and responsibility for fulfilling the principal's obligations.

Absolute Sureties

Individuals or entities that guarantee the performance of a debtor or contractual obligations without any conditions.