Laws that require, for example, vehicles to have catalytic converters or that restrict or prohibit leaf burning are both examples of:
A)Pigouvian taxes.
B)internalization of externalities.
C)transaction costs.
D)environmental standards.

Question

Quizplus · Accepted Answer

These laws are examples of environmental standards, which are government regulations aimed at reducing environmental impacts and protecting public health. They typically set limits on emissions, discharges, or other pollutants, and mandate specific technologies or practices to achieve those limits. In contrast, Pigouvian taxes are charges levied on activities that generate negative externalities, such as pollution, to internalize the costs of that harm. Internalization of externalities involves creating incentives for individuals or firms to take into account the social costs or benefits of their actions, which can be achieved through taxes, subsidies, or property rights. Transaction costs are the costs associated with exchanging goods or services, such as negotiating prices, finding a buyer or seller, or enforcing contracts.

Laws That Require, for Example, Vehicles to Have Catalytic Converters