If the Government Decides to Adopt a Carbon Tax,the Price

question 52

Multiple Choice

If the government decides to adopt a carbon tax,the price of goods whose production generates carbon emissions will ________ and the quantity produced will ________.

• A) increase; increase
• B) increase; decrease
• C) increase; remain unchanged
• D) decrease; increase
• E) decrease; decrease

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the level of goods or services produced within a certain range.

Break-even Sales

The amount of revenue needed to cover total costs, both fixed and variable, with no profit or loss.

Unit Selling Price

The cost for which customers can purchase an individual unit of a product.

Unit Variable Costs

Unit variable costs are the costs that vary directly with the production volume, including costs for materials and labor that change with the level of production or service provision.