One problem with the effectiveness of Pigovian taxes is:
A. the tax does not directly compensate those who are affected by the externality.
B. knowing whether to impose it on the consumer or producer.
C. the tax is always used to benefit those who bear the externalities.
D. none of the above is a problem of Pigovian taxes.
A. the tax does not directly compensate those who are affected by the externality.
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Opportunity cost is defined as the
A) total value of all the alternatives given up B) highest-valued alternative given up C) cost of not doing all of the things you would like to do. D) lowest-valued alternative given up
If strong aggregate demand is pushing the economy beyond potential real GDP, which of the following must be true?
A) Expansionary monetary policies will push the economy back to the long-run Phillips curve. B) The economy is at an equilibrium that is not on the long-run Phillips curve. C) The economy is at an equilibrium that is on the long-run aggregate supply curve. D) The economy is at an equilibrium that is on the long-run Phillips curve.
Which of the following statements about markets is not true?
a. A market is an impersonal mechanism. b. Markets coordinate the independent decisions of buyers and sellers. c. Markets reduce the transaction costs of exchange. d. More specialized markets are generally found in urban areas. e. All markets provide the same amounts of information.
”I oppose a free trade agreement with Mexico because American workers will lose jobs to low-paid Mexican workers.” Explain whether you agree or disagree with this statement.
What will be an ideal response?