Question
Which of the following should be considered for ‘Pigovian taxation’?
- Consumption of cigarettes
- Research for new technologies
- Burning of fossil fuels
- Restoration of lost cultural heritage
Answer: Option B
Answer: (b)A Pigovian tax is applied to a market activity that is generating negative externalities (costs for somebody else) like cigarette consumption, burning of fossil fuel.
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Answer: (b)A Pigovian tax is applied to a market activity that is generating negative externalities (costs for somebody else) like cigarette consumption, burning of fossil fuel.
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