A pollution tax will:
A. always be paid entirely by producers.
B. not change the price buyers pay for a good.
C. be shared between buyers and sellers.
D. always be paid entirely by buyers in the form of a price increase equal to the amount of the tax.
Answer: C
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The more substitutable current consumption is with future consumption, the more likely it is that an increase in the interest rate will cause an increase in savings.
Answer the following statement true (T) or false (F)
In 2007, the interest rate banks in France charge each other for loans was 4.86 percent. The inflation rate in France in 2007 was 2.8 percent. The real interest rate in France is
A) 7.62 percent B) 2.06 percent. C) 0.58 percent. D) 13.6 percent.
If the interest rate falls, the present value of $100 to be received in one year
A) rises. B) falls. C) is unaffected. D) might rise, fall, or not change.
A country's government would like to raise the price of one its most important agricultural crops, coffee beans. Which of the following government programs will result in higher prices for coffee beans?
A) An import quota on coffee beans B) An acreage limitation program which provides coffee bean farmers financial incentives to leave some of their acreage idle C) An import tariff on coffee beans D) all of the above