Which of the following is an example of a Pigovian tax?
A) payments by utilities to obtain tradable emission allowances
B) a payroll tax
C) payments for licenses to pollute
D) a tax imposed on a utility that internalizes the cost of externalities caused by the utility
Answer: D
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The quantity theory of money and prices rests on the assumption that
A) the minimum wage is constant. B) the velocity of money is constant. C) the nominal interest rate is constant. D) the foreign exchange rate is constant.
In the United States for the year 2014, the federal government had a ________ so the national debt was ________
A) budget deficit; increasing B) balanced budget; not changing C) budget surplus; decreasing D) budget deficit; decreasing E) budget surplus; increasing
If the marginal tax rate is less than the average tax rate, the tax system is
A) progressive. B) proportional. C) regressive. D) liberal.
If the marginal utility of each good consumers buy does not diminish but remains constant, we should witness consumers:
A. buying no goods at all. B. spending all of their income on the good with the highest MU. C. buying one of each good. D. buying only the least expensive goods.