A Pigovian tax is intended to:
A. counter the effect of a negative externality.
B. decrease total surplus in a market.
C. decrease efficiency in a market.
D. All of these statements are true.
Answer: A
You might also like to view...
A rent ceiling creates a shortage. As a result, there is
A) an efficient allocation of housing. B) a surplus of housing. C) an increase in the producer surplus in the housing market. D) a decrease in the producer surplus in the housing market.
According to the 2005 UNDP Human Development Report child mortality (under age 5) has declined in all regions of the world except:
(a) South Asia (b) Sub-Saharan Africa (c) Middle East and North Africa (d) None of the above
By the 2000s, an important change in the mortgage market had occurred when ________ became significant participants in the secondary market for mortgages by buying, bundling, and reselling mortgages as mortgage-backed securities
A) commercial banks B) investment banks C) financial markets D) foreign governments
Assume that the economy is currently in short-run equilibrium, then the dollar appreciates in the foreign exchange market. Describe the correct sequence of events that happen as the economy adjusts to a new short-run equilibrium (be sure to state what the impact would be on the price level and Real GDP)