Which of the Following Statements Is Correct About a Market

question 386

Multiple Choice

Which of the following statements is correct about a market in which pollution is emitted?

• A)Both corrective taxes and pollution permits internalize the externality of pollution.
• B)Corrective taxes internalize the externality of pollution, but pollution permits do not internalize that externality.
• C)Corrective taxes fail to internalize the externality of pollution, but corrective taxes internalize that externality.
• D)Neither corrective taxes nor pollution permits internalize the externality of pollution.

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Definitions:

CPI Rose

Refers to an increase in the Consumer Price Index, indicating that the average prices of consumer goods and services have gone up, often a measure of inflation.

$7 Per Hour

A specified wage rate where an individual or worker is paid seven dollars for each hour worked.

Purchasing Power

The economic value of a currency depicted by the number of goods or services obtainable by a single monetary unit.

US$ Per C$

The exchange rate that defines how much one can buy in US dollars (US$) with one Canadian dollar (C$).