Use the Table Below to Answer the Following Question

question 105

Multiple Choice

Use the table below to answer the following question.
Table 15.2.3

-Refer to Table 15.2.3.The first two columns of the table show the demand schedule for electricity from a coal burning utility;the second and third columns show the utility's cost of producing electricity. The marginal external cost of the pollution created is equal to the marginal cost.
Suppose the government levies a pollution tax such that the utility generates the efficient quantity of electricity.The pollution tax is ________ cents a kilowatt hour.

• A)2
• B)4
• C)6
• D)8
• E)10

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Definitions:

Mass Consumption

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A period in the early 20th century characterized by a wide range of political, economic, and social reforms aimed at addressing problems stemming from industrialization, urbanization, and corruption.

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Simon Patten

An American economist known for his theories on wealth, consumer behavior, and the welfare state, influential in the early 20th century.