Asked by Joshua Najera on Jun 01, 2024
Verified
Pigovian taxes
A) are used to correct negative externalities.
B) are used to correct positive externalities.
C) are primarily designed to fund government.
D) are a form of income tax.
Pigovian Taxes
Taxes levied on any market activity that generates negative externalities, intended to correct an undesirable or inefficient market outcome.
Negative Externalities
These are the adverse effects experienced by a third party or society as a whole due to an economic transaction they are not directly involved in.
Government Funding
Financial support provided by the government for various programs, projects, or sectors to achieve economic or social objectives.
- Discern the effects that externalities have on resource distribution and grasp how interventions by the government like Pigovian taxes and cap-and-trade schemes help in addressing these concerns.
Verified Answer
Learning Objectives
- Discern the effects that externalities have on resource distribution and grasp how interventions by the government like Pigovian taxes and cap-and-trade schemes help in addressing these concerns.
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