Suppose that in the production of good X, a signiﬁcant quantity of pollution is generated. The government is likely to _____.

Question

Quizplus · Accepted Answer

Imposing taxes on goods that generate significant pollution is a common government strategy to internalize the external costs of pollution. This makes the production of such goods more expensive, potentially reducing their production and the associated pollution.

Suppose That in the Production of Good X, a Signiﬁcant