Marginal Benefit (MB) to Firm MBBETA MBALPHA Tax = $100 25 50 75 100 Emissions (tons) Figure 16.5 Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free. Refer to Figure 16.5. The government decides to impose a tax on pollution of $100 per ton of emissions. Which of the follow are true? (Select all that are true.) O a. As a result of the tax, the total emissions will decrease by 50 units O b. As a result of the tax, both firms will decrease emissions by the same amount O c. As a result of the tax, Alpha will cut more emissions than Beta O d. Before the tax, Beta produced more emissions than Alpha O e. The amount of tax collected is $2500 O f. After the tax, Beta will produce 50 tons more than Alpha O g. The tax was intended to decrease production by 50 units for each firm. O h. As a result of the tax, total emissions will be cut in half
Marginal Benefit (MB) to Firm MBBETA MBALPHA Tax = $100 25 50 75 100 Emissions (tons) Figure 16.5 Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free. Refer to Figure 16.5. The government decides to impose a tax on pollution of $100 per ton of emissions. Which of the follow are true? (Select all that are true.) O a. As a result of the tax, the total emissions will decrease by 50 units O b. As a result of the tax, both firms will decrease emissions by the same amount O c. As a result of the tax, Alpha will cut more emissions than Beta O d. Before the tax, Beta produced more emissions than Alpha O e. The amount of tax collected is $2500 O f. After the tax, Beta will produce 50 tons more than Alpha O g. The tax was intended to decrease production by 50 units for each firm. O h. As a result of the tax, total emissions will be cut in half
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 5PA
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