The text shows that a tax that changes economic behavior may actually improve efficiency, if there was inefficiency in the absence of the tax. In each of the following cases, i) design a tax that would improve efficiency, and ii) evaluate the tax in terms of the criteria of equity:

a) The national savings rate is excessively low because usury laws have kept interest rates low and because many people distrust banks.

b) The air over major American cities is polluted because people are allowed to emit wastes into the atmosphere free of charge.

c) Municipal water supplies are running short because of overuse.

d) Too many unmotivated students are taking up space in local, publicly supported colleges.