Polluter Pays Principle Quiz

What is the main idea behind the Polluter Pays Principle?

• Companies should be allowed to pollute if they pay a fee.

• Consumers should pay more for environmentally friendly products.

• Polluters should be financially responsible for the damage they cause.

• The government should pay for pollution cleanup.

How do Pigovian taxes help address negative externalities?

• By reducing the cost of production.

• By taxing the social cost of negative externalities.

• By subsidizing environmentally friendly companies.

• By providing tax breaks to polluting companies.

What challenge is associated with implementing the Polluter Pays Principle?

• Ensuring all companies agree to the principle.

• Convincing consumers to pay more for goods.

• Finding enough polluters to tax.

• Calculating the exact monetary value of social ills like pollution.

Why might a flat tax on gas be considered unfair?

• It encourages the use of more fossil fuels.

• It disproportionately impacts those with lower incomes.

• It only affects high-income individuals.

• It provides no revenue for environmental projects.

Which level of legislation tends to be more successful in implementing the Polluter Pays Principle?

• Corporate

• National

• International

• State or local