When Economists Propose Taxes as a Way to Balance Out

Multiple Choice

When economists propose taxes as a way to balance out the presence of externalities,they try to propose taxes:

A) on the action that creates the externality, rather than the externality itself.
B) based on the externality itself, rather than the action that creates it.
C) on what is simplest to implement.
D) on what will likely generate the most revenue.