A difficulty with using a uniform per-unit tax to address a negative externality is that
A) the tax will reduce output.
B) the tax will increase price.
C) the social cost of pollution might vary across geographic regions.
D) the social cost of pollution should not be assessed on the consumers, but should be assessed on the firms.
C
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Which of the following describes a situation in which demand must be elastic?
a. Total revenue increases by 15 percent when the price of corndogs rises by 15 percent. b. Total revenue increases by less than 15 percent when the price of corndogs rises by 15 percent. c. Total revenue decreases by more than 15 percent when the price of corndogs rises by 15 percent. d. Total revenue increases by $15 when the price of corndogs rises by $15. e. Total revenue increases by more than $15 when the price of corndogs rises by $15.
In determining whether a further investment in education for an individual is worth the costs, an economist would look at whether the sum of the
A. annual education costs is exceeded by the sum of the increases in income that are attributable to the increased education. B. present value of the annual education costs is exceeded by the sum of the present value of the annual income to the person. C. annual education costs is exceeded by the sum of annual income to the person. D. present value of the annual education costs is exceeded by the sum of the present value of the increases in income that are attributable to the increased education.
If the price of a commodity increases, you can usually expect the:
A. quantity supplied to decrease. B. supply to increase. C. quantity supplied to increase. D. supply curve to shift to the right.
Which of the following is an example of a forward contract?
A. A farmer near Ames and a local ethanol plant agree on a price and quantity of corn to be delivered later today. B. A farmer near Ames and Key Co-Op agree on a price and quantity of corn to be delivered 6 months from now. C. A farmer near Ames goes short on a futures contract. D. A farmer in Ames sells corn to a Canadian firm.