When economists propose taxes as a way to balance out the presence of externalities, they try to propose taxes:
A. on the action that creates the externality, rather than the externality itself.
B. based on the externality itself, rather than the action that creates it.
C. on what is simplest to implement.
D. on what will likely generate the most revenue.
B. based on the externality itself, rather than the action that creates it.
You might also like to view...
For each of the following changes, show the effect on the demand curve and state what will happen to market equilibrium price and quantity in the short run
a. Consumers expect that the price of the good will be higher in the future. b. The price of a substitute good rises. c. Consumer incomes fall, and the good is normal. d. Consumer incomes fall, and the good is inferior. e. A medical report is published showing that this good is hazardous to your health. f. The price of the good rises.
If net exports are negative, then aggregate demand will be less than the sum of consumption, investment, and government purchases
a. True b. False Indicate whether the statement is true or false
If aggregate supply rises sharply so that a recession occurs, then the prescription is for expansionary fiscal policy
Select whether the statement is true or false. A. True B. False
If the interest rate in the French economy increases, then the most likely outcome would be that, in France, the
a. economy will move to a new point along its existing consumption curve b. consumption curve will shift upward c. investment curve will shift downward d. investment curve will shift upward e. economy will move to a new point along its existing investment curve