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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. This is an example of:
(a) the Coase Theorem
(b) a Pigovian subsidy
(c) a transaction cost
(d) a Pigovian tax
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