Refer to above figure in which negative externality existed. The government imposes a $1.00 pollution tax on the producer. Supply shifts leftward.
A. This tax will be borne entirely by the producer.
B. The amount of the tax shifted to the consumer depends on the consumer's elasticity of the demand curve.
C. This tax will be shifted entirely to the consumer.
D. The tax will be divided into equal amounts between consumer and producer.
Answer: B
You might also like to view...
Refer to Table 6-5. Katie Graham owns a kayak rental service in Santa Barbara. Table 6.5 shows her estimated demand schedule for kayak rentals per week. She would like to increase her sales revenue by changing the price she charges for rentals
At present she charges $75. Based on the information in the table, Katie A) should raise her price to $80 to increase her revenue because the demand for kayak rentals is price inelastic. B) should raise her price to earn the most revenue. C) should lower her price to $60 to increase her revenue because the demand for kayak rentals is price elastic. D) is not able to increase her revenue by changing her price because the demand for kayak rentals is unit elastic.
Clark is willing to pay $100 for a new softball glove. If the market price for the glove is $150, _____
a. he will purchase the glove as his marginal utility is maximized b. he will not purchase the glove as his marginal utility is negative c. he will purchase the glove as it will increase his total utility d. he will not purchase the glove because the market price is greater than the price he is willing to pay
Which of the following is true? If a central bank runs out of reserve assets, then:
a. Actually, it is impossible for a nation to run out of reserve assets because the central bank could always print more money to increase it. b. It cannot intervene in the foreign exchange market to raise the value of the nation's currency. c. It must fix its exchange rate to a strong currency because the central bank can no longer allow the currency to fluctuate. d. The central bank must borrow from its Treasury to increase the nation's reserve assets. e. It cannot intervene in the foreign exchange market to lower the value of the nation's currency.
Which of the following is incorrect? During the Great Recession U.S:
a. Wealth fell. b. Unemployment duration rose. c. Stock market rose. d. Inflation fell. e. All of the above are correct.