Incentive-based regulations provide polluters no incentive to reduce pollution and are thus not used often.

During a banking panic, c ________, e ________, and the money supply ________

A) rises, rises, falls B) rises, falls, is unaffected C) falls, falls, is unaffected D) falls, rises, rises E) falls, falls, falls

If the government sets a specific tax and an ad valorem tax so that they raise the same amount of tax revenue, why does the ad valorem tax reduce output less than the specific tax?

What will be an ideal response?