Suppose the Government Wants to Impose a Tax on Fossil $\ln ( 1 - \mathrm { P } ) = - 0.0039 - 0.0048 \mathrm { x }$

question 164

Multiple Choice

Suppose the government wants to impose a tax on fossil fuels to reduce carbon emissions. The cost benefit is modeled by $\ln ( 1 - \mathrm { P } ) = - 0.0039 - 0.0048 \mathrm { x }$ , where $\mathrm { x }$ represents the dollars of tax per ton of carbon emitted and $\mathrm { P }$ represents the percent reduction in emissions of carbon. ( $P$ is in decimal form.) Determine $P$ when $x = 52$ . Round to three decimal places.

• A) \(- 0.19\)
• B) \(0.224\)
• C) \(1.776\)
• D) \(- 0.218\)

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Definitions:

Mexican Government

The federal constitutional republic of Mexico, which is governed by a president and a bicameral legislature.

Fixed Exchange-Rate System

An exchange rate regime where a country's currency value is pegged to another currency, a basket of currencies, or a commodity like gold.

Local Currency

The currency that is legally accepted within a country and typically used for all financial transactions within that geographical boundary.

Flexible Exchange Rates

A system where the value of a currency is determined by the foreign exchange market, depending on the supply and demand for that currency.