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If a Tin of Sardines Creates a Noxious Odor for Non-Sardine-Eaters

Question 5

Multiple Choice

If a tin of sardines creates a noxious odor for non-sardine-eaters equivalent to $1 per tin, a $1 per tin tax on sardines would:


A) create a deadweight loss, as all taxes do, and correct the odorous externality.
B) decrease deadweight loss but fail to correct the odorous externality.
C) create a deadweight loss and fail to correct the odorous externality.
D) decrease deadweight loss by correcting the odorous externality.

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