A(n) ______ is a tax on a good with external costs.
A) specific tax
B) ad valorem tax
C) Orwellian tax
D) Pigouvian tax

Question

Quizplus · Accepted Answer

A Pigouvian tax is a tax on a good with external costs. It is named after economist Arthur Pigou, who argued that such a tax would help to internalize the external costs associated with a good or activity, and thus incentivize individuals and firms to behave in ways that are more socially optimal.

A(n) ______ Is a Tax on a Good with External