A carbon tax placed on a fossil fuel:
A. is a pollution tax based on the carbon content of the fuel.
B. is a form of marketable pollution permit.
C. is often used in conjunction with command-and-control carbon policies.
D. will not change the price of the fossil fuel taxed.
Answer: A
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Refer to Figure 2.1. What is the opportunity cost of increasing production of manufactured products from 500 tons to 600 tons per year?
A) 200 tons of agricultural products per year B) 400 tons of agricultural products per year C) 500 tons of agricultural products per year D) 600 tons of agricultural products per year
All but one of the following have been suggested by some economists as possible consequences of path dependency and switching costs. Which of the following is not a possible consequence of path dependency and switching costs?
A) diseconomies of scale B) market failure C) Consumers may get locked into using products with inferior technology. D) Government intervention may be necessary in affected markets in order to improve economic efficiency.
If your disposable income increases from $10,000 to $15,000 and your consumption increases from $9,000 to $12,000, your marginal propensity to consume is:
A.0.8 B.0.6 C.0.4 D.0.2
Suppose the demand for butter increases from 800 to 1,000 pounds when income falls from $40,000 to 30,000. Income elasticity is:
A. 50. B. 0.77. C. -0.77. D. 0.02.