Which of the following is not a potential problem in using corrective taxation to deal with a negative externality?
A)Measuring the cost of the externality.
B)Estimating the supply curve of the externality creator.
C)Determining who is responsible for the externality.
D)Determining how the tax should be applied.

Question

Quizplus · Accepted Answer

Estimating the supply curve of the externality creator is not directly a problem in using corrective taxation to address a negative externality. The main issues involve measuring the cost of the externality, determining responsibility, and deciding on the tax application method. The supply curve estimation is more related to understanding market responses than to the initial implementation of a corrective tax.

Which of the Following Is Not a Potential Problem in Using