Question

Corrective taxes differ from most taxes in that corrective taxes

a. do not cause deadweight losses.
b. always result in a high burden on sellers of goods to which the corrective tax applies.
c. reduce economic efficiency.
d. do not raise revenue for the government.

Answer 1

Corrective taxes different from most taxes that corrective taxes do not cause deadweight losses.

A corrective tax is a market based option used to address activities that affect other companies. These taxes increase the cost of producing a good or service which has companies producing less items.