A carbon tax is an example of:
A)a Coase theorem solution.
B)a Pigovian tax.
C)a market failure.
D)a Coase tax.

Name: A carbon tax is an example of: A)a Coase theorem solution. B)a Pigovian tax. C)a market failure. D)a Coase tax.
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Question

Quizplus · Accepted Answer

A carbon tax is an example of a Pigovian tax, which is imposed to correct the negative externalities (like pollution) that a market activity imposes on society, which is not accounted for by the market itself.

A Carbon Tax Is an Example Of