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Homework answers / question archive / Assume that production from an electric utility caused acid rain and that the government imposed a tax on the utility equal to the cost of the acid rain

Assume that production from an electric utility caused acid rain and that the government imposed a tax on the utility equal to the cost of the acid rain

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Assume that production from an electric utility caused acid rain and that the government imposed a tax on the utility equal to the cost of the acid rain. This is an example of:

(a) the Coase Theorem

(b) a Pigovian subsidy

(c) a transaction cost

(d) a Pigovian tax

Option 1

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Option 2

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