Suppose cars are taxed according to the amount of pollution they emit per gallon
ID: 1198982 • Letter: S
Question
Suppose cars are taxed according to the amount of pollution they emit per gallon of gasoline consumed. We would expect to observe all of the following EXCEPT
A an increase in production of automobiles that were less polluting.
B an increase in quantity demanded of more fuel-efficient cars.
C an increase in quantity demanded of less-polluting automobiles and a reduction in quantity demanded of more-polluting automobiles.
D an increase in the miles driven.
Suppose cars are taxed according to the amount of pollution they emit per gallon of gasoline consumed. We would expect to observe all of the following EXCEPT
A an increase in production of automobiles that were less polluting.
B an increase in quantity demanded of more fuel-efficient cars.
C an increase in quantity demanded of less-polluting automobiles and a reduction in quantity demanded of more-polluting automobiles.
D an increase in the miles driven.
good that has social costs that are less than private costs has a quantity that is
equal to zero.
B just right.
C too low.
D too high.
If the external costs of production are not taken into account, then production will
be more than socially desirable.
be the same since only prices are affected by externalities.
be less than socially desirable.
D cease.
The inclusion of external costs in the decision making process determining equilibrium price and quantity leads to
A higher priced items and increased quantity.
B lower priced items and increased quantity.
lower priced items and a decline in quantity.
higher priced items and a decline in quantity.
A good that has external benefits associated with its production will be
overproduced.
not produced.
underproduced.
produced at the optimal level.
The Endangered Species Act has
had no impact on either the number of endangered species or other economic activities.
further reduced the number of endangered species.
saved all endangered species without affecting anyone.
caused a loss of economic activities on some private land.
Private costs are
costs borne by private members of society rather than governmental bodies.
costs borne solely by the individuals who incur them.
explicit costs rather than implicit costs.
external costs borne by private firms.
Attaining higher and higher levels of air cleanliness causes
additional costs to fall to lower and lower levels.
larger and larger marginal benefits to society.
additional costs to rise to increasingly high levels.
larger and larger increases in per capita incomes.
The government is considering levying a tax on the pollution generated from two electric power plants (Plant A and Plant B). Plant A is located in a city with a high density of population, and Plant B is located in the rural area with a low density of population. The government should
levy the same tax per unit of pollution on both plants.
B tax only Plant A but not Plant B because Plant B generates less revenue.
levy a higher tax per unit of pollution on Plant B because of its lower economic damage.
levy a higher tax per unit of pollution on Plant A because of its higher economic damage.
A an increase in production of automobiles that were less polluting.
B an increase in quantity demanded of more fuel-efficient cars.
C an increase in quantity demanded of less-polluting automobiles and a reduction in quantity demanded of more-polluting automobiles.
D an increase in the miles driven.
Suppose cars are taxed according to the amount of pollution they emit per gallon of gasoline consumed. We would expect to observe all of the following EXCEPT
A an increase in production of automobiles that were less polluting.
B an increase in quantity demanded of more fuel-efficient cars.
C an increase in quantity demanded of less-polluting automobiles and a reduction in quantity demanded of more-polluting automobiles.
D an increase in the miles driven.
good that has social costs that are less than private costs has a quantity that is
Aequal to zero.
B just right.
C too low.
D too high.
If the external costs of production are not taken into account, then production will
Abe more than socially desirable.
Bbe the same since only prices are affected by externalities.
Cbe less than socially desirable.
D cease.
The inclusion of external costs in the decision making process determining equilibrium price and quantity leads to
A higher priced items and increased quantity.
B lower priced items and increased quantity.
Clower priced items and a decline in quantity.
Dhigher priced items and a decline in quantity.
A good that has external benefits associated with its production will be
Aoverproduced.
Bnot produced.
Cunderproduced.
Dproduced at the optimal level.
The Endangered Species Act has
Ahad no impact on either the number of endangered species or other economic activities.
Bfurther reduced the number of endangered species.
Csaved all endangered species without affecting anyone.
Dcaused a loss of economic activities on some private land.
Explanation / Answer
1. An increase in themiles driven because all others will happen if tax si levied as per emission of pollution
2. Toohigh because cost will be borne by society while revenue will come ot producer
3. more than socially desirable level because cost is being borne by the society.
4. Highly priced item and quantity will decline
5. Underproduced because if social benefit is added new equilibrium will be at higher level of output.
6. caused a loss of economic activities on some private lands because these lands are creating troble in survival of ndangered species.
7. costs borne by private members of society rather than governmental bodies.
8. Larger and larger marginal benefit ot the society.
9.
levy a higher tax per unit of pollution on Plant A because of its higher economic damage.
becase in case of environmentla ssues economc damage is measured in terms of population affected.
levy a higher tax per unit of pollution on Plant A because of its higher economic damage.