A tax on gasoline can be used to correct a market failure? true or false

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A tax on gasoline can be used to correct a market failure? true or false

A tax on gasoline can be used to correct a market failure?

true or false

business economics

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Answer 1

Answer #1

True.

Negative externalities within an economy can lead to market failure.
It can cause the markets to allocate good and services inefficiently.
A tax on gasoline is an indirect tax used to correct a market failure.
When gasoline is taxed, then people will reduce its consumption and the amount of pollution done by driver's will hence fall.

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Answer 2

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A tax on gasoline can be used to correct a market failure? true or false

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A tax on gasoline can be used to correct a market failure? true or false

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