Figure 18.2.2 -If the MSB/MCA Graph Indicates That an Emissions Fee of Fee

question 11

Multiple Choice

Figure 18.2.2
-If the MSB/MCA graph indicates that an emissions fee of $10 per unit would lead to the optimum level of emissions, but the government set a fee of $5 per unit, emissions would:

• A) not be reduced at all.
• B) not occur at all.
• C) be above the optimum level, but curtailed somewhat from what they would have been with no fee at all.
• D) be above the optimum level by 50%.
• E) be below the optimum level by 50%.

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