If the revenues from a Pigovian tax are not directed to those who are affected by the externality, the outcome:
A. is efficient and maximizes surplus.
B. is not efficient and does not maximize surplus.
C. is not efficient and maximizes surplus.
D. is efficient, but does not maximize surplus.
Answer: A
You might also like to view...
In a monopsonistic labor market, workers are paid a wage:
a. below their MRP. b. equal to the intersection of MRP and S. c. equal to the MFC. d. equal to the price of the output. e. above their MFC.
The law of supply implies that
A. Supply curves are downward-sloping to the right. B. Supply curves are flat. C. A change in a determinant of demand shifts the supply curve. D. Supply curves are upward-sloping to the right.
One way investment banks differ from commercial banks is that investment banks
A) lend exclusively to households. B) do not take in deposits. C) only buy and sell mortgages. D) trade only in foreign exchange markets.
When workers boycott a company because it does business with a firm whose employees are on strike, that is a
A) secondary boycott. B) primary boycott. C) strike. D) sympathy strike.