Pigovian taxesA) are used to correct negative externalities.B) are used to correct positive externalities.C) are primarily designed to fund government.D) are a form of income tax.

Question

Paige Medinger · Accepted Answer

Final Answer : A, Explanation :  Pigovian taxes are implemented to reduce negative externalities, such as pollution or traffic congestion, by making the producers or consumers pay for the social costs associated with their production or consumption. The tax creates an incentive for them to reduce their use of the product or technology that causes the negative externality, and seek alternatives that are less harmful to the environment or society.

Pigovian taxes

A) are used to correct negative externalities.
B) are used to correct positive externalities.
C) are primarily designed to fund government.
D) are a form of income tax.

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