For the same amount of pollution emitted, an emissions tax is said to be more efficient than an environmental standard because all polluters:
A) emit pollution up to the point at which the marginal benefit of polluting is equal to the emissions tax.
B) emit the same amount of pollution, regardless of the marginal benefit of polluting.
C) pay the same total tax bill for their pollution.
D) reduce pollution emissions to zero.

Question

Quizplus · Accepted Answer

An emissions tax allows polluters to emit pollution up to the point where the marginal benefit of polluting equals the tax, leading to cost-effective pollution reduction across different polluters.

For the Same Amount of Pollution Emitted, an Emissions Tax