Question 6: To correct for a negative externality, a government might impose a u

Question

Question 6:

To correct for a negative externality, a government might impose a uniform tax related only to the physical quantity of pollution if

Question 7:

In order to internalize the externality due to pollution, the government should impose a tax based on

Question 8:

In a market for emission permits, firms that emit over their allowed limits

Question 9:

The 1997 Kyoto Protocol was signed by

Question 10:

The problem of overfishing in waters that are commonly owned can be solved by

Explanation / Answer

6. To correct for a negative externality, a government might impose a uniform tax related only to the physical quantity of Pollution if the administrative costs are high.

Answer - Option B

7. In order to internalize the externality due to pollution, the government should impose a tax based on the marginal external costs created by the pollution. The amount of tax should be equal to marginal external cost or, Marginal external damage in order to internalize the externality and produce socially efficient quantity.

Answer- option D

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