Asked by Mercy Ikediuba on May 28, 2024
Verified
Taxes on sulfur dioxide emissions,excise taxes on gas,and sales taxes are all examples of Pigouvian taxes.
Pigouvian Taxes
Taxes imposed on activities that generate negative externalities, aiming to correct market outcomes by aligning private costs with social costs.
Sulfur Dioxide Emissions
Refers to the release of sulfur dioxide gas into the atmosphere, primarily from burning fossil fuels, which can cause environmental and health problems.
Excise Taxes
Taxes charged on the sale of specific goods and services, such as alcohol and tobacco, often used as a tool for discouraging their consumption.
- Distinguish between different types of taxes and their intended effects on market behavior and efficiency.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
False
Explanation :
Pigouvian taxes are designed to correct for negative externalities, such as pollution, by taxing the activity that causes the harm. Taxes on sulfur dioxide emissions are an example of Pigouvian taxes because they aim to reduce air pollution. However, excise taxes on gas and sales taxes are generally aimed at raising revenue rather than correcting for a specific negative externality, so they are not considered Pigouvian taxes.
Learning Objectives
- Distinguish between different types of taxes and their intended effects on market behavior and efficiency.