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Author Question: What is a Pigovian tax? What happens to deadweight loss when a Pigovian tax is implemented? What ... (Read 46 times)

stephzh

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on: Jun 29, 2018
What is a Pigovian tax? What happens to deadweight loss when a Pigovian tax is implemented?
 
  What will be an ideal response?

Question 2

The income elasticity of demand measures
 
  A) the income effect of a change in price.
  B) the responsiveness of quantity demanded to changes in income.
  C) how a consumer's purchasing power is affected by a change in the price of a product.
  D) the percentage change in the price of a product divided by the percentage change in consumer income.
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Bigfoot1984

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A Pigovian tax is a government tax intended to bring about an efficient level of output in the presence of externalities. A Pigovian tax eliminates deadweight loss.

Answer to Question 2

B


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