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Suppose you are assigned the task of drafting a law to impose a tax on smoke emissions. What provisions would you put into the law? How would you decide the size of the tax? What would you do about smoke emitted by a municipal electricity plant? Would you use the same tax rate in densely and sparsely settled areas? What information will you need to collect before determining what you would do about each of the preceding provisions?

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Microeconomics: Principles & Policy

14th Edition
William J. Baumol + 2 others
Publisher: Cengage Learning
ISBN: 9781337794992

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BuyFindarrow_forward

Microeconomics: Principles & Policy

14th Edition
William J. Baumol + 2 others
Publisher: Cengage Learning
ISBN: 9781337794992
Chapter 16, Problem 2DQ
Textbook Problem
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Suppose you are assigned the task of drafting a law to impose a tax on smoke emissions. What provisions would you put into the law?

  1. How would you decide the size of the tax?
  2. What would you do about smoke emitted by a municipal electricity plant?
  3. Would you use the same tax rate in densely and sparsely settled areas?
  4. What information will you need to collect before determining what you would do about each of the preceding provisions?

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